Latest news with #OlaplexHoldings
Yahoo
25-06-2025
- Business
- Yahoo
Do Options Traders Know Something About Olaplex Stock We Don't?
Investors in Olaplex Holdings, Inc. OLPX need to pay close attention to the stock based on moves in the options market lately. That is because the Sep 19, 2025 $5 Call had some of the highest implied volatility of all equity options today. Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy. Clearly, options traders are pricing in a big move for Olaplex shares, but what is the fundamental picture for the company? Currently, Olaplex is a Zacks Rank #3 (Hold) in the Consumer Products - Discretionary industry that ranks in the Top 37% of our Zacks Industry Rank. Over the last 60 days, the Zacks Consensus Estimate for the current quarter has moved from 2 cents per share to 1 cent in that the way analysts feel about Olaplex right now, this huge implied volatility could mean there's a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected. Check out the simple yet high-powered approach that Zacks Executive VP Kevin Matras has used to close recent double and triple-digit winners. In addition to impressive profit potential, these trades can actually reduce your to see the trades now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Olaplex Holdings, Inc. (OLPX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
19-04-2025
- Business
- Yahoo
Is Olaplex Holdings, Inc. (NASDAQ:OLPX) Trading At A 37% Discount?
Olaplex Holdings' estimated fair value is US$1.93 based on 2 Stage Free Cash Flow to Equity Olaplex Holdings is estimated to be 37% undervalued based on current share price of US$1.22 Analyst price target for OLPX is US$1.98, which is 2.5% above our fair value estimate Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Olaplex Holdings, Inc. (NASDAQ:OLPX) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. We've discovered 2 warning signs about Olaplex Holdings. View them for free. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$70.4m US$94.0m US$97.7m US$91.5m US$88.1m US$86.6m US$86.3m US$86.7m US$87.8m US$89.3m Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Est @ -6.39% Est @ -3.65% Est @ -1.73% Est @ -0.38% Est @ 0.56% Est @ 1.21% Est @ 1.67% Present Value ($, Millions) Discounted @ 8.5% US$64.9 US$79.9 US$76.5 US$66.0 US$58.6 US$53.1 US$48.7 US$45.2 US$42.1 US$39.5 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$575m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.8%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.5%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$89m× (1 + 2.8%) ÷ (8.5%– 2.8%) = US$1.6b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$1.6b÷ ( 1 + 8.5%)10= US$706m The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$1.3b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$1.2, the company appears quite undervalued at a 37% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Olaplex Holdings as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.5%, which is based on a levered beta of 1.327. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Olaplex Holdings Strength Debt is well covered by cash flow. Weakness Earnings declined over the past year. Interest payments on debt are not well covered. Opportunity Trading below our estimate of fair value by more than 20%. Threat Annual earnings are forecast to decline for the next 3 years. Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. What is the reason for the share price sitting below the intrinsic value? For Olaplex Holdings, we've put together three relevant aspects you should further examine: Risks: To that end, you should learn about the 2 warning signs we've spotted with Olaplex Holdings (including 1 which is potentially serious) . Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for OLPX's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
08-03-2025
- Business
- Yahoo
Olaplex Holdings, Inc. (OLPX): Why Are Hedge Funds Bullish On This Cash-Rich Penny Stock?
We recently compiled a list of the . In this article, we are going to take a look at where Olaplex Holdings, Inc. (NASDAQ:OLPX) stands against the other cash-rich penny stocks. Shares priced under $5, commonly referred to as penny stocks, are a tempting bet for investors chasing big returns with minimal upfront investment. They typically come from smaller companies worth less than $300 million and are known for their wild price swings, low liquidity, and high risk. While they can deliver massive gains, they are just as likely to lead to steep losses due to limited financial data and unpredictable price movements. Speculative investors are drawn to them, but smart investing means balancing these high-risk picks with more stable assets. Sometimes these stocks are undervalued, offering early investors a shot at big rewards if the company takes off. For example, many investors regret not buying up shares of Jeff Bezos' e-commerce giant when the company went public in 1997, with shares priced under $2. By 1998, it had already shed its penny stock label, and the last time it dropped under $100 was back in 2009. Similarly, investors lament not picking up the iPhone maker's shares back in 2003, when it was trading at $6.56 and almost a penny stock. Penny stocks typically come from small-cap and mid-cap companies, which have historically delivered higher returns than large-cap stocks due to their growth potential and higher risk. However, in recent years, these smaller companies have struggled to keep up, as large-cap stocks, especially tech giants, have significantly outperformed. One primary reason is the shifting composition of major stock indices. The broader market's dominance by a few mega-cap companies has skewed overall market performance. If the Magnificent Seven stocks were excluded each year, the market's lead over the small-cap Russell would shrink considerably. Small-cap stocks ended 2024 with their second consecutive positive quarter, rising 0.3% in the fourth quarter, as reported by Royce Investment Partners. However, they still could not keep up with large-cap stocks, as the Russell large cap index gained 2.7%. Despite some volatility, small-cap stocks reached a new high in late November, more than three years after their last peak, making it one of the longest recovery periods in the index's history. In 2025, market volatility is expected to return to normal levels. But instead of seeing it as a threat, long-term investors view volatility as an opportunity. History shows that after periods of high market turbulence, small-cap stocks often deliver stronger returns than their large-cap counterparts. Keeping that in mind, let's take a look at some cash-rich penny stocks which are Wall Street favorites as well. For this article, we used the Finviz stock screener to find penny stocks with strong cash reserves. We filtered for companies with stocks priced under $5 and a current ratio (CR) above 2, which indicates they have more assets than liabilities, due to high cash reserves, receivables, or inventory. After that, we manually looked for companies with a trailing twelve-month (TTM) operating cash flow of over $20 million as of December 31, 2024 and picked 12 stocks with the highest cash reserves. We also included hedge fund sentiment as of Q4 2024 and we've ranked the list in ascending order of the number of hedge fund holders in each firm. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A professional hairstylist styling a client's hair with a variety of hair care products. TTM Operating Cash Flow as of December 31, 2024: $142,445,000 Number of Hedge Fund Holders: 15 Share Price as of March 4: $1.375 Established in 2014, Olaplex Holdings, Inc. (NASDAQ:OLPX) is headquartered in Santa Barbara, California. It is a hair care company that develops and sells products for hair treatment, maintenance, and protection. Its offerings include shampoos, conditioners, oils, masks, and serums. Olaplex is refreshing its brand while staying focused on science-based hair care. The company is strengthening its digital presence and visual identity to align with its commitment to innovation and professional stylists. OLPX ranks 10th on our list of the best cash-rich stocks to invest in. In Q4, Olaplex Holdings, Inc. (NASDAQ:OLPX)'s net sales declined 9.8% year-over-year to $100.7 million. The loss in sales resulted from a combination of weaker international performance, delayed impact from brand marketing investments, and higher competition during the holiday season. On the bright side, the balance sheet stayed strong. With lower working capital needs and better operational discipline, the company's cash reserves grew by $120 million to $586 million in 2024. Inventory was also trimmed down by $20.7 million to $75.2 million at year-end. Heading into 2025, the company feels confident about its inventory and plans to keep investments in line with sales growth. Among the hedge funds tracked by Insider Monkey in Q4, 15 funds were bullish on Olaplex Holdings, Inc. (NASDAQ:OLPX), compared to 18 funds in the preceding quarter. Jim Simons' Renaissance Technologies was the biggest stakeholder of the company, with 3 million shares valued at $5.3 million. Overall OLPX ranks 10th on our list of the best cash-rich penny stocks to buy. While we acknowledge the potential of OLPX as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than OLPX but that trades at less than 5 times its earnings, check out our report about the . READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
