WALD Stock Forecast & Price Target

Waldencast PLC is experiencing a positive growth trajectory, highlighted by a 5.6% year-over-year increase in sales for the second quarter, contributing to a projected revenue increase of 13% year-over-year for FY25. The success of both the Obagi and Milk Makeup segments is evident, with a notable reacceleration in growth to 10.1% in Q3, driven by eCommerce and international expansion, as well as strategic innovations. Additionally, Milk Makeup's consumption in the U.S. has risen by 12% year-to-date, significantly outpacing the overall prestige beauty market growth rate, indicating strong consumer demand and brand positioning.

Waldencast PLC has reduced its FY25 outlook, now guiding for flat revenue and an adjusted EBITDA margin reflecting high single digits, indicating a deterioration in financial performance. The company's consolidated adjusted gross margin contracted 310 basis points year-over-year to 71.9%, driven largely by significant declines in the Milk Makeup segment, which faced a 20% year-over-year sales drop. Additionally, while Obagi experienced growth of 10.1% year-over-year, total sales fell 3.4% year-over-year, exacerbated by underperformance in the Milk Makeup brand and weaker consumption in international markets.