Shares of Oddity Tech (NASDAQ: ODD) stock fell 22% in August, according to data from S&P Global Market Intelligence. It posted its first quarterly report as a public company, and while the results were excellent, the stock had already shot up right after its initial public offering (IPO). High-growth IPO stocks often pull back after an initial jump.

Oddity operates two websites, Il Makiage cosmetics and SpoiledChild hair and skincare, that sell direct-to-consumer products. It uses artificial intelligence to assess consumer needs and develop formulas and recommendations for custom preferences. It uses a sophisticated system that has hyperspectral capabilities, which means it can evaluate a customer's skin from a smartphone image with greater accuracy than the human eye. That's an incredible feature for any skincare company, but all the more so for a digital-based operation, since it takes care of one of the main blocks to buying skincare products online. It should also reduce returns significantly.

Another way it's differentiated from similar companies is that it works with influencers, who post video tutorials and reviews to Oddity's sites using its own video program. This provides constant fresh content for the websites to keep customers coming back, and it's a way to find target customers through influencers that they follow.

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Source Fool.com