Oddity Tech (NASDAQ: ODD) shares suffered a dramatic collapse during Wednesday’s trading session, falling nearly 50% despite a broadly positive market environment.
As of 3:45 p.m. ET, ODD had plummeted 49.9% while the S&P 500 gained 0.8% and the Nasdaq Composite climbed 1.2% during the same period.
The sharp decline came despite Oddity actually beating Wall Street expectations for its fourth-quarter results, which were released before markets opened Wednesday.
In Q4, Oddity posted non-GAAP earnings per share of $0.20, topping the average analyst estimate by $0.06 for the period.
Revenue for the quarter came in at $152.73 million, exceeding analyst estimates by $1.65 million and representing 23.5% year-over-year sales growth.
The strong quarterly performance was overshadowed entirely by the company’s forward guidance, which alarmed investors and triggered the massive selloff.
Oddity, a digital-first tech specialist for brands in the beauty and wellness category, guided for sales to decline roughly 30% year over year in the current quarter.
The company attributed the projected decline to higher-than-expected acquisition costs and an algorithmic mismatch with one of its major advertising partners.
Management indicated that performance was expected to improve meaningfully later in the year, but investors appeared unconvinced by those assurances.
The stark contrast between a solid Q4 beat and a deeply negative Q1 outlook left the market taking what analysts would describe as a clear “show-me” approach to the stock’s near-term prospects.
