Thousands of stocks fly under most investors’ radars, but that doesn’t mean all of them are worthy of your attention. In an attempt to make it easier to narrow down the huge universe of stocks to find the most interesting prospects, the Voyager Portfolio uses some sophisticated tools to screen through available candidates. Although the first company included in the portfolio is fairly large, it’s likely that most of the stocks this portfolio will include are going to be smaller.
That’s certainly true of the second stock that’s going to go into the Voyager Portfolio. Even the name of this company would make some investors think twice before committing their hard-earned investment capital to its shares. But as a potential growth stock, Oddity Tech (NASDAQ: ODD) has some compelling stories to tell. In the coming days, you’ll learn more about Oddity’s financial position and plans for capturing what it sees as an intriguing opportunity. Today, though, let’s concentrate on exactly what Oddity Tech does and why its unique approach to artificial intelligence could pay off in the long run.
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The beauty industry plays a substantial role in the consumer economy. If you’ve ever noticed that major department stores tend to put their cosmetics departments front and center near their entrances, you might have guessed that sales of these high-margin products are particularly lucrative for retailers. Not every customer is interested in the latest beauty products, but those shoppers who do show interest are often willing to spend substantial amounts to get the results they want. The long-term results for beauty disruptors like Ulta Beauty (NASDAQ: ULTA) and e.l.f. Beauty (NYSE: ELF) show the potential for companies willing to take a different approach from traditional cosmetics companies.
Oddity has taken more of a picks-and-shovels approach toward beauty. It has created a technology platform that’s specifically tailored to meet the needs of cosmetics and beauty products consumers. Those shoppers who use Oddity’s platform gain access to a host of tools that can help them find the best products more quickly – and also funnel more business to Oddity’s beauty brands.
Oddity takes a tech-forward approach to serving its customers. Its platform invites users to answer questions about their specific needs, similar to what a shopper might do with an in-store beauty consultant. By collecting detailed information, Oddity has built a solid early track record of 90% accuracy through AI-powered product matching tools.
But that’s just the beginning. Cutting-edge computer vision tools use algorithms that can more accurately map facial contours, and hyperspectral vision capabilities take an even more in-depth look at skin condition and features. Through the use of generative AI, Oddity can offer projections of what a customer might look like after using a tailored selection of beauty products. By combining purchase data, product reviews, and this latest vision technology, Oddity’s multi-modal data approach improves its AI modeling steadily, encouraging repeat experiences from users.
Meanwhile, Oddity is supporting innovation in beauty at the product level as well. Through biotechnology expertise and AI-based molecule discovery tools, Oddity is aiming to help accelerate advances in key areas like hair and skin care. Its analysis shows that such innovation is long overdue. For instance, in over 10 years, only seven unique ingredients for treating thinning hair have come into the industry. Over 90% of skin-care products rely on the same active ingredients, with minimal efforts to find new candidates. That spells a huge opportunity for Oddity.
Given these early successes, it’s interesting to take a look at how Oddity’s stock has performed since its mid-2023 IPO. The next article in this three-part series on Oddity Tech will look more closely at the up-and-down moves in the share price and what could lie ahead for the new niche player in beauty technology.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ulta Beauty and e.l.f. Beauty. The Motley Fool has a disclosure policy.
