WALD Stock Forecast & Price Target

Waldencast PLC has demonstrated a positive growth trajectory, with a reported 5.6% year-over-year increase in total sales for Q2, reaching $66.8 million, despite slightly falling short of initial estimates. Both the Obagi and Milk Makeup segments contributed to this growth, particularly highlighting the momentum in eCommerce and international markets, which was further bolstered by Milk Makeup's new innovations and expansion onto the Amazon Premium Beauty platform. Additionally, the year-to-date consumption growth for Milk Makeup in the U.S. at 12% significantly outpaces the overall growth of the prestige beauty market, underscoring the brand's competitive positioning and potential for future revenue increases.

Waldencast PLC faces a negative outlook primarily due to a revised FY25 forecast reflecting flat revenue and a shrinking adjusted EBITDA margin projected at high single digits, signaling fundamental weaknesses in operational performance. The company's consolidated adjusted gross margin contracted by 310 basis points year-over-year, significantly underperforming against expectations, largely due to a notable decline in the Milk Makeup segment, which saw a 20% drop in sales. Although the Obagi Medical segment exhibited growth, it was insufficient to offset the overall 3.4% decline in total sales, raising concerns about sustainability and growth prospects amidst a challenging market environment.