ODDITY Tech. Ltd. Securities Class Action After 49% Share Plunge on AI Platform Disruption and 30% Q1 2026 Revenue Decline

A securities class action lawsuit has been filed against ODDITY Tech. Ltd. (NASDAQ: ODD), seeking to represent investors who purchased ODDITY securities between February 26, 2025 and February 24, 2026.

The filing comes after ODDITY’s American Depositary Shares fell 49% on February 25, 2026. The selloff wiped out more than $600 million in market capitalization, following the company’s announcement that it expects a 30% year-over-year decline in Q1 2026 revenue.

Allegations at the center of the lawsuit

The complaint alleges that ODDITY repeatedly promoted its AI-driven online platform and told investors it would “sustain our high-growth and attractive margin profile.” It further alleges that the company made false and misleading statements while failing to disclose material information.

Specifically, the complaint claims ODDITY did not disclose an algorithm change by its largest advertising partner. The alleged change, according to the complaint, resulted in ODDITY’s advertisements being diverted to lower-quality auctions at abnormally high costs. The complaint says this increased ODDITY’s customer acquisition costs and harmed the company’s business and financial outlook.

The filing also alleges that these issues led ODDITY to overstate the strength, stability, and sustainability of its digital operating model.

Market reaction and company disclosure

Investors reacted sharply on February 25, 2026, when ODDITY announced its Q4 and FY 2025 results and disclosed that it “experienced a dislocation in our account with our largest advertising partner that we believe was driven by algorithm changes which diverted us to lower quality auctions at abnormally high costs” and that those changes drove new user acquisition costs significantly higher.

During the related earnings call, an analyst asked when ODDITY first became aware of the dislocation. The company reportedly responded that it had “observed that something was different in the second half of 2025,” without specifying when the issue began.

Revenue guidance tied to the alleged dislocation

ODDITY quantified the impact of the dislocation by stating it expects Q1 2026 revenue to decline 30% year-over-year.

Investigation and next steps

Reed Kathrein, a Hagens Berman partner leading the investigation, said the firm is investigating when ODDITY first knew of the dislocation issue and whether the company may have intentionally misled investors about the true strength of its AI growth driver.

The lawsuit includes the following parameters:

• Class Period: Feb. 26, 2025 – Feb. 24, 2026
• Lead Plaintiff Deadline: May 11, 2026

The firm also encouraged investors who suffered significant losses to submit their losses and encouraged witnesses with information that may assist the investigation to contact its attorneys.

Whistleblower note

The filing also references the SEC Whistleblower program, stating that whistleblowers who provide original information may receive rewards totaling up to 30% of any successful recovery made by the SEC.

Firm background

Hagens Berman is described as a global plaintiffs’ rights complex litigation firm focused on corporate accountability, and the release states the firm has secured more than $2.9 billion in this area of law.