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Piper Sandler analysts said the firm decided to downgrade the stock based on results from its quarterly salon survey. The survey results were “not great” for OLPX.
According to the analysts, the salon survey has historically been a good leading indicator of overall company performance.
“Respondents noting Olaplex as a preferred brand is still weak (new low of ~82%), penetration within the salon seems to have leveled out at ~60%, over half of respondents are still calling out negative Olaplex treatment demand impacts from macro, and competition remains elevated,” they wrote.
They added: “We struggle to see a scenario where Olaplex can succeed as a professional quality brand without the support of its stylists and without things improving now about a year since our first cautious-toned survey, we don’t have confidence in a recovery playing out.”
