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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 follows a 49% decline in the price of ODDITY American Depositary Shares on February 25, 2026, which wiped out over $600 million in market capitalization.
The selloff was triggered by ODDITY’s announcement that it expects a 30% year-over-year decline in its Q1 2026 revenue. Hagens Berman, a national shareholders’ rights firm, said it is investigating whether ODDITY violated federal securities laws and urged investors who suffered significant losses to submit their claims.
The complaint alleges that ODDITY repeatedly promoted its AI-driven online platform and asserted it would “sustain our high-growth and attractive margin profile.” It claims the company made false and misleading statements while allegedly failing to disclose crucial information to investors.
Specifically, the complaint alleges that ODDITY did not disclose an algorithm change by its largest advertising partner that diverted ODDITY’s advertisements to lower-quality auctions at abnormally high costs. According to the complaint, this increased ODDITY’s customer acquisition costs and negatively affected the company’s business and financial outlook.
The lawsuit also alleges that these issues led ODDITY to overstate the overall strength, stability, and sustainability of its digital operating model.
Investors’ expectations were affected on February 25, 2026, when ODDITY announced its Q4 and FY 2025 financial results. In connection with those results, ODDITY said it “experienced a dislocation in our account with our largest advertising partner” that it believes was driven by algorithm changes diverting it to lower-quality auctions at abnormally high costs, which it said drove new user acquisition costs significantly higher.
During the related earnings call, an analyst asked when ODDITY first knew about the dislocation. Management responded that it had “observed that something was different in the second half of 2025,” without specifying when the issue began.
ODDITY also quantified the impact, stating it expects Q1 2026 revenue to decline 30% year-over-year.
“We’re investigating when ODDITY first knew of the dislocation issue and whether it may have intentionally misled investors about the true strength of its AI growth-driver,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
The firm said investors with substantial losses, or individuals with knowledge that may assist the investigation, should submit their information.
The firm also noted that persons with non-public information regarding ODDITY should consider options to assist the investigation or take advantage of the SEC Whistleblower program. It said whistleblowers who provide original information may receive rewards totaling up to 30% of any successful recovery made by the SEC.
Source: Hagens Berman Sobol Shapiro LLP
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