The Adore Beauty Group Ltd (ASX: ABY) share price is bouncing back after hitting a record low on Monday.
In afternoon trade, the online beauty retailer's shares are up 4.5% to $4.74.
Despite this gain, the Adore Beauty share price is still trading 30% lower than its October IPO listing price of $6.75.
Image source: Getty Images
Why is the Adore Beauty share price charging higher today?
Investors have been buying the company's shares on Tuesday following the release of a presentation that will be delivered at the Goldman Sachs 12th Annual Emerging Leaders Conference today.
While the presentation didn't provide an update on its trading since the end of the first half, it did give investors an idea of where the company is heading.
According to the presentation, the Australian beauty and personal care market is worth an estimated $11.2 billion at present. However, as of 2020, just 11.6% of these sales were made online by consumers.
The good news is that COVID-19 has accelerated online penetration in the retail sector, putting Adore Beauty in a strong position to win market share over the coming years.
Especially given its broad portfolio of over 260 brands and 10,800 products. This includes products from some of the most popular beauty companies such as The Ordinary, Aspect, Aveda, Eleven, Mac, and Estee Lauder.
The company also has a strong customer base to grow from. At the last count, it had just under 800,000 active customers and generated $96.2 million in revenue from them during the first half of FY 2021. This was up 85% on the prior corresponding period.
Are its shares in the buy zone?
Two brokers that see a lot of value in the Adore Beauty share price are UBS and Morgan Stanley.
Earlier this month UBS put a buy rating and $6.20 price target on the company's shares. Whereas, following its half year results in February, Morgan Stanley put an overweight rating and ambitious $8.25 price target on its shares.
Based on the current Adore Beauty share price, these price targets imply potential upside of ~31% and ~74%, respectively.
