Kits Eyecare (KITS) AI Stock Analysis

• Market Cap: C$454.82M
• Dividend Yield: N/A
• Average Volume (3M): 25.50K
• Price to Earnings (P/E): 97.6
• Beta (1Y): 0.89
• Revenue Growth: 34.10%
• EPS Growth: N/A
• Country: CA
• Employees: 162
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Specialty Retail
• EPS (TTM): 0.05
• Shares Outstanding: 32,006,916
• 10 Day Avg. Volume: 26,622
• 30 Day Avg. Volume: 25,496
• PEG Ratio: 0.03
• Price to Book (P/B): 4.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.29
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$16.63
• Price Target Upside: 15.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 77 Outperform
• Price Target: C$16.50 ▲(14.98%Upside)

Kits Eyecare's overall stock score of 77 reflects its strong financial performance and positive earnings outlook, driven by impressive revenue growth and strategic investments. The technical indicators support a short-term bullish trend, although the high P/E ratio suggests caution due to high valuation. Corporate events further bolster confidence in the company's future growth prospects.

Positive Factors

Earnings

Gross margin was 36.7% exceeding estimates, driven by strong organic growth of 34% for the third consecutive quarter.

Growth Opportunities

The company has the potential to double its capacity to ~$500M, indicating significant growth opportunities.

Product Development

Upcoming AI tools, termed 'Optician AI', are expected to enhance customer experience.

Negative Factors

Financial Performance

The Q2 EBITDA margin guidance is below street expectations due to planned marketing investments.

Guidance

Management guided Q1/25 revenue between $46-48M, a positive surprise, along with 4-6% Adj. EBITDA margin.

Valuation Concerns

KITS is valued at a lower multiple compared to e-commerce peers with similar growth rates, suggesting it remains notably undervalued.

Kits Eyecare Business Overview & Revenue Model

Company Description

KITS Eyecare is a leading online eyewear retailer that focuses on providing a wide range of high-quality eyewear products, including prescription glasses, contact lenses, and sunglasses. The company operates primarily in the e-commerce sector, leveraging a direct-to-consumer model to deliver a seamless shopping experience. KITS Eyecare prides itself on offering competitive prices, fast delivery, and exceptional customer service.

How the Company Makes Money

KITS Eyecare generates revenue primarily through the sale of eyewear products via its online platform. The company's key revenue streams include the sale of prescription glasses, which often involve an upsell of premium lens options and coatings, and contact lenses, which cater to a recurring customer base due to the need for regular replacements. Additionally, KITS Eyecare may benefit from partnerships with eyewear brands and suppliers, allowing it to offer a diverse range of products. The company's direct-to-consumer model helps reduce overhead costs and increase margins, contributing to its overall profitability.

Kits Eyecare Financial Statement Overview

Summary

Kits Eyecare demonstrates a strong recovery with improving revenue, profitability, and cash flow metrics. While the balance sheet shows low leverage and solid equity, past financial instability highlights the need for ongoing stability. The company's trajectory appears positive, but continued monitoring of financial health is recommended.

Income Statement

Kits Eyecare has shown a solid recovery with significant revenue growth over the past few years. The gross profit margin improved to 33.7%, and the net profit margin turned positive to 2% in the latest period. EBIT and EBITDA margins also showed positive trends, reflecting operational efficiency gains. However, historical volatility in earnings should be noted.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.22, indicating low leverage. The return on equity is positive at 5.38%, showcasing profitability. The equity ratio stands at 56.2%, reflecting a strong equity base. Although improving, prior challenges in equity and assets suggest caution.

Cash Flow

Operating cash flow significantly improved, and free cash flow growth is strong at 436%. The operating cash flow to net income ratio is robust, suggesting efficient cash generation. Free cash flow to net income ratio also shows adequate conversion. Historical cash flow volatility remains a consideration.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
159.34M	120.51M	91.64M	82.40M	75.22M
	Gross Profit
53.65M	40.79M	29.25M	20.89M	21.39M
	EBIT
5.43M	-2.38M	-4.35M	-17.05M	122.00K
	EBITDA
8.31M	1.86M	-721.00K	-14.68M	-1.80M
	Net Income Common Stockholders
3.12M	-2.21M	-4.55M	-14.62M	-6.58M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.27M	16.04M	18.79M	20.50M	2.31M
	Total Assets
103.02M	87.64M	93.86M	90.94M	54.66M
	Total Debt
12.60M	15.39M	19.44M	22.94M	22.33M
	Net Debt
-6.67M	-646.00K	648.00K	2.44M	20.02M
	Total Liabilities
45.13M	36.20M	40.16M	36.16M	55.23M
	Stockholders Equity
57.89M	51.45M	53.71M	54.78M	-573.00K
Cash Flow		Free Cash Flow
9.88M	1.84M	4.42M	-23.09M	3.96M
	Operating Cash Flow
13.04M	2.40M	4.68M	-19.46M	4.18M
	Investing Cash Flow
-3.15M	-563.00K	-258.00K	-3.63M	-225.00K
	Financing Cash Flow
-5.02M	-5.07M	-5.13M	41.48M	-4.84M

Kits Eyecare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KITS, the sentiment is Positive. The current price of 14.35 is above the 20-day moving average (MA) of 13.29, above the 50-day MA of 12.10, and above the 200-day MA of 10.08, indicating a bullish trend. The MACD of 0.72 indicates Negative momentum. The RSI at 73.32 is Negative, neither overbought nor oversold. The STOCH value of 85.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:KITS.

Kits Eyecare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KITS	77 Outperform	C$454.82M	97.62	8.21%	―	34.10%	―
LNF	73 Outperform	C$1.92B	12.06	14.49%	2.78%	0.47%	9.41%
GBT	65 Neutral	C$416.94M	14.16	5.95%	2.79%	5.97%	174.18%
Sector *	62 Neutral	$6.84B	11.41	2.80%	3.87%	2.70%	-24.58%
ECOM	51 Neutral	C$7.11M	―	204.61%	―	-10.48%	94.56%
NTAR	48 Neutral	$6.46M	―		―	-36.77%	83.80%

Kits Eyecare Corporate Events

Kits Eyecare Reports 2025 AGM Voting Results

Kits Eyecare Ltd. announced the results of its 2025 Annual General Meeting, where all proposed resolutions were passed, including the election of six directors and the re-appointment of MNP LLP as auditors. The voting results reflect strong shareholder support, positioning the company to continue its focus on innovation and customer satisfaction in the digital eyecare industry.

The most recent analyst rating on (TSE:KITS) stock is a Buy with a C$11.25 price target. To see the full list of analyst forecasts on Kits Eyecare stock, see the TSE:KITS Stock Forecast page.

Kits Eyecare Achieves Record First Quarter Results with 34% Revenue Growth

Kits Eyecare Ltd. reported a record-breaking first quarter in 2025, with a 34% increase in revenue year-over-year, reaching $46.6 million. The company’s adjusted EBITDA also improved significantly to $3.5 million, marking its tenth consecutive quarter of positive adjusted EBITDA. The growth was driven by increased sales of glasses, with 104,000 pairs delivered, and a focus on acquiring high-value customers. This financial performance underscores the strength of Kits’ vertically integrated model and its strategic focus on operational efficiency, positioning the company for sustained profitable growth.