On Tuesday, DA Davidson adjusted its outlook on Waldencast Acquisition Corp. (NASDAQ: WALD) shares, reducing the price target to $6.50 from the previous $15.50, while still endorsing the stock with a Buy rating.
The revision follows Waldencast's release of restated financial results and the appointment of a new Chief Financial Officer, alongside the resolution of operational issues at its Obagi skincare brand.
The company, which had not reported results since the third quarter of 2022, revealed its first quarter 2024 numbers, showcasing strong growth for both Obagi and Milk Makeup, with high profitability.
Waldencast also provided guidance for 2024, anticipating double-digit sales growth and a mid-teens EBITDA margin, an improvement from the 11% margin in 2023.
The firm updated its previously outdated 2024 estimates to reflect a 15% year-over-year increase in sales and a 40% rise in EBITDA to $34 million. Additionally, DA Davidson commenced its 2025 estimates for Waldencast.
Despite the positive outlook on the company's growth and profitability, the price target has been lowered, now based on a 27 times multiple of the projected $46 million EBITDA for 2025.
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