When Can I Buy Olaplex Stock?

When Can I Buy Olaplex Stock?

The hair product company is going public with a $12.3 billion valuation, but when can you buy Olaplex stock and is it a good investment?

I won’t lie; when I saw Olaplex was going public, I got pretty excited as it’s one of my favorite beauty products of all time. If you have ever bleached your hair and visited a salon, it’s likely that your hairdresser recommended it. Alternatively, if you searched “Help, how do I save my broken hair after going blonde?!”, Google would have likely pointed you towards countless blogs telling you the benefits of Olaplex. 

With a massive valuation put on the company before it IPOs this week, this hair-rescue firm is likely to make a splash on Wall Street. 

What is Olaplex? 

Olaplex is a cult-followed hair products company that has become very popular since it launched in 2014. While other shampoo and treatment brands focused on hair’s outer appearance, promising glossy and healthy-looking locks, Olaplex did something different by offering products that repaired the hair follicles bond. 

Beauty customers flocked to the brand when they realized that to get truly healthy hair, they had to start from within and repair the broken bonds in their hair caused by heat damage, bleaching, and general styling – and that’s exactly what Olaplex delivered. 

The company enjoys massive brand loyalty from its customers and is often recommended to use by professional stylists. Olaplex is often trending on TikTok and is favored by beauty gurus and influencers for its award-winning bond repaid technology. 

It offers shampoos, conditioners, hair masks, oils, and many other products. (However, in my experience as someone who regrettably went from brunette to blonde, Olaplex’s holy grail product is their number 3 hair perfector.) 

When is Olaplex going public?

Olaplex is set to kick off its stock market debut on Thursday, September 30 on the Nasdaq under the ticker ‘OLPX.’

What price are Olaplex shares going public at?

Olaplex shares are expected to cost between $17 and $19 per share, up from the $14 to $16 price range it had previously set. The company intends to raise $1.2 billion through the sale of 67 million shares. 

Olaplex’s financials 

Olaplex is owned by Advent International, a private equity firm, which bought the blonde builder expert in January 2020. After its IPO, Advent will own 78.2% of Olaplex, according to a prospectus. 

Unlike many other firms planning a stock market debut, Olaplex is already profitable. In the first half of 2021, its net income jumped to $94.9 million year-over-year (YoY) from a net loss of $22.4 million. In 2020, sales increased 90% YoY to $282.3 million and 171% YoY in the first six months of 2021.

If we consider the company’s pro forma market cap, its trailing price-to-sales multiple is 27.2x compared to rival L’Oréal which has a next-12-month sales multiple of 6.3x. All in all, its financials look solid and are in a much better position than other young companies. This is likely a factor driving bullish sentiment over the IPO. 

Olaplex’s growth potential

Olaplex’s products are very popular and demand is continuing to rise. The company is really benefiting from the trend of consumers becoming more concerned with keeping their hair healthy.

Last year, the global haircare space was estimated to be worth a whopping $77 billion and is expected to grow 6% compounded annually between 2020 to 2025. This proves that Olaplex has a massive market to address which will boost sales. 

In other positive news, around 76% of professional hairstylists say that Olaplex is of higher quality than other rival brands. In 2020, its adjusted EBITDA rose to $199 million from $100 million in the previous year, and professionals attributed 55% of Olaplex’s total net sales. Professionals buying it proves that this is a high-standard product, fueling bullish sentiment over the soon-to-be public listing. 

In MyWallSt fashion, we always recommend investors wait until the company has produced at least two earnings reports as a publicly-traded stock to limit risk. 

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