Value
5.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 8.1 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.2 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 20.8x
- ▸PEG: 0.03
OLPX · Why this verdict
Why Olaplex Holdings (OLPX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Growth has slowed sharply, with the revenue growth component scoring just 3.1 out of 10, reflecting a stalled top line. Components | The revenue growth component score rises above 5.0 as sales reaccelerate. | →Stable |
| CounterA beauty and haircare brand facing slowing growth after a hyper-growth phase may still be executing well on margins and market share even as YoY comparisons get tougher. | ||
Olaplex remains FCF-positive despite a GAAP loss, generating a 15% FCF margin and posting a strong Piotroski F-Score of 9/9, even though its Rule of 40 score fails at 18. Quality breakdown | FCF margin stays above 10% and the Piotroski F-Score holds at 8/9 or higher. | →Stable |
| CounterA 9/9 Piotroski score built on a company with a failing Rule of 40 (18 vs the 40 pass line) suggests the underlying growth engine remains structurally weak despite clean balance-sheet mechanics. | ||
The stock has already exceeded its analyst price target, now showing -16.8% implied upside, and the risk/reward asymmetry failed at -1.12 because downside risk of 15% outweighs the remaining upside. Warnings | The upside-to-target gap recovers to positive territory, above 0%. | →Stable |
| CounterPositive momentum and being near a 52-week high can persist beyond fundamentally-derived price targets in a squeeze or re-rating scenario. | ||
Olaplex carries a low PEG ratio of 0.03 despite a 20.8x forward P/E, suggesting the multiple could be justified if growth reaccelerates. Valuation breakdown | PEG ratio stays below 0.5 as the multiple and growth rate move together. | →Stable |
| CounterA PEG this low mechanically results from very low forecast growth in the denominator, which can flatter the ratio without reflecting genuine undervaluation. | ||
The risk score sits elevated at 7.8 out of 10, the highest-risk dimension for the stock in this review. Risk | The risk score declines below 6.0 as volatility and other risk inputs normalize. | →Stable |
| CounterAn elevated risk score during a positive momentum phase may simply reflect near-term volatility rather than a genuine deterioration in fundamentals. | ||
Growth has slowed sharply, with the revenue growth component scoring just 3.1 out of 10, reflecting a stalled top line.
→StableComponents
- Expectation
- The revenue growth component score rises above 5.0 as sales reaccelerate.
CounterA beauty and haircare brand facing slowing growth after a hyper-growth phase may still be executing well on margins and market share even as YoY comparisons get tougher.
Olaplex remains FCF-positive despite a GAAP loss, generating a 15% FCF margin and posting a strong Piotroski F-Score of 9/9, even though its Rule of 40 score fails at 18.
→StableQuality breakdown
- Expectation
- FCF margin stays above 10% and the Piotroski F-Score holds at 8/9 or higher.
CounterA 9/9 Piotroski score built on a company with a failing Rule of 40 (18 vs the 40 pass line) suggests the underlying growth engine remains structurally weak despite clean balance-sheet mechanics.
The stock has already exceeded its analyst price target, now showing -16.8% implied upside, and the risk/reward asymmetry failed at -1.12 because downside risk of 15% outweighs the remaining upside.
→StableWarnings
- Expectation
- The upside-to-target gap recovers to positive territory, above 0%.
CounterPositive momentum and being near a 52-week high can persist beyond fundamentally-derived price targets in a squeeze or re-rating scenario.
Olaplex carries a low PEG ratio of 0.03 despite a 20.8x forward P/E, suggesting the multiple could be justified if growth reaccelerates.
→StableValuation breakdown
- Expectation
- PEG ratio stays below 0.5 as the multiple and growth rate move together.
CounterA PEG this low mechanically results from very low forecast growth in the denominator, which can flatter the ratio without reflecting genuine undervaluation.
The risk score sits elevated at 7.8 out of 10, the highest-risk dimension for the stock in this review.
→StableRisk
- Expectation
- The risk score declines below 6.0 as volatility and other risk inputs normalize.
CounterAn elevated risk score during a positive momentum phase may simply reflect near-term volatility rather than a genuine deterioration in fundamentals.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Olaplex remains free-cash-flow positive despite a GAAP loss and trades at a low PEG ratio, but slowing revenue growth, an already-reached price target, and an elevated risk score outweigh the positive momentum.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.1 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 6.7 |
| FCF quality | 6.6 |
| Moat | 5.4 |
| Rule of 40 | 3.0 |
| Piotroski F | 10.0 |
- ▸FCF-positive despite GAAP loss (FCF margin 15%, FCF yield 4.7%)
- ▸No competitive moat
- ▸Rule of 40: 18 (fail)
- ▸Strong Piotroski F-Score: 9/9
Growth
3.1/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.1 |
Momentum
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 6.5 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.3 |
| erm sentiment | 5.0 |
Insider
7.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
- ▸Negligible insider selling — $56,472 (0.004% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.8 |
| quality rank | 0.5 |
| growth rank | 3.8 |
- ▸Conservative debt levels
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 2.0 |
| 52w position | 9.9 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.8 |
| days to cover | 8.8 |
| volatility | 10.0 |
| put call | 10.0 |
| max pain risk | 3.0 |
| beta | 3.9 |
| debt equity | 8.4 |
- ▸Above max pain $0
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:7.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:30d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.12
Upside
-16.8%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.84>1.3, MCap $1.4B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.12 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.5, Catalyst at 7.5, and Momentum at 7.3; the weakest are Growth at 3.1, Peer rank at 3.7, and Technical at 4.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.12 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Fcf Positive Despite Gaap Loss
Trip ifFCF margin falls below 5% of revenue from the current 15%.
- P2Growth Deceleration Signal
Trip ifThe revenue growth component score falls below 1.0 out of 10 from the current 3.1.
- P3Target Reached Valuation Ceiling
Trip ifThe stock trades more than 25% above its analyst price target, worse than the current -16.8% upside.
- P4Peg Implies Value Support
Trip ifPEG ratio rises above 1.0 from the current 0.03.
- P5Elevated Overall Risk Score
Trip ifThe risk score exceeds 9.0 out of 10 from the current 7.8.