WALD Stock Forecast & Price Target

Waldencast PLC demonstrated a solid upward trajectory in its revenue, reporting a 5.6% year-over-year increase in sales for the second quarter, driven by both the Obagi Skincare and Milk Makeup segments. The company's growth momentum accelerated in the third quarter, with a notable 10.1% increase attributed to expanding e-commerce capabilities and international growth, even amidst adjustments in distribution strategies. Furthermore, Milk Makeup's U.S. consumption outpaced market growth, with an impressive year-to-date increase of 12%, significantly exceeding the growth of the prestige beauty market.

Waldencast PLC has further reduced its FY25 outlook, projecting flat revenue and a high single-digit adjusted EBITDA margin, signaling a lack of growth momentum. The company's consolidated adjusted gross margin contracted by 310 basis points year-over-year to 71.9%, driven primarily by significant declines in the Milk Makeup segment, which experienced a 20% year-over-year decrease in sales. Despite some growth in the Obagi Medical segment, the overall decline in total sales, coupled with disappointing adjusted EBITDA performance, raises concerns about the company's ability to meet previous growth expectations.