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Shares of the parent company of beauty brands under the Oddity Tech Ltd. (NASDAQ: ODD) brand, such as IL MAKIAGE, SpoiledChild, and others, plummeted on February 25, 2026, falling by more than 50 percent to a close of about $14-15, having traded much higher at the start of the previous day (around 29). This is a dramatic fall despite the company giving good full-year 2025 records, with revenue increasing 25% to $810 million and adjusted EBITDA of 163 million dollars.

The cause was the pessimistic outlook adopted by the management in 2026 that will start in the first half, and then it will go into the first quarter of 2026; the revenue is likely to be decreased by about thirty percent annually. According to executives, this has been due to a dislocation in their account with their biggest advertising partner, probably one of the large digital platforms, due to a change in the algorithms. The changes would lead to a decrease in the quality of auctions, unnaturally high costs of customer acquisition (CAC), and making the try-before-you-buy feature of Oddity less visible, which would relegate brands to a lower position in search engines and negatively impact conversions.

There was no guidance for a full year in 2026 because of the uncertainty regarding the time of the resolution. Analysts responded promptly: Jefferies reduced its rating to Hold (downgraded from Buy), and Needham also reduced its rating to Hold, citing headwinds that it encountered because of advertisements. Other reports identified the problem to particularly affect the user acquisition model of return rates and quality of experience.

The stock was heavily punished by investors, and volume increased to tens of millions of shares as panic selling caught hold. The fall wiped out most of recent gains and took ODD close to its 52-week low. As the firm has a strong balance sheet and is making efforts to resolve the ad problems, the abrupt change of direction has cast doubt on short-term growth rates in the competitive digital beauty environment. Investors and non-seller traders are now waiting to see an improvement as the management continues to work on fixing the problems with the platform.