Kits Eyecare (KITS) AI Stock Analysis

• Market Cap: C$654.70M
• Dividend Yield: N/A
• Average Volume (3M): 53.64K
• Price to Earnings (P/E): 115.6
• Beta (1Y): 1.16
• Revenue Growth: 32.31%
• EPS Growth: N/A
• Country: CA
• Employees: 162
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.06
• Shares Outstanding: 32,267,204
• 10 Day Avg. Volume: 77,427
• 30 Day Avg. Volume: 53,639
• PEG Ratio: -0.36
• Price to Book (P/B): 4.59
• Price to Sales (P/S): 1.67
• P/FCF Ratio: 26.88
• 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$21.88
• Price Target Upside: 7.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: C$22.50 ▲(10.89% Upside)

Kits Eyecare's strong financial performance and positive technical indicators are the most significant factors driving the score. The high P/E ratio suggests caution in valuation, but the company's robust earnings call performance and growth prospects provide a solid foundation for future growth.

Positive Factors

Sustained Revenue Growth

Consistent, double-digit revenue growth and sustained adjusted EBITDA across multiple quarters indicate durable demand and improving operating leverage. This gives management room to invest in product development and customer acquisition while preserving profitability momentum over the medium term.

Large, Growing Customer Base

A growing active customer base above one million signals strong brand adoption and higher lifetime value potential. Durable customer scale supports repeat purchase economics, marketing efficiency gains, and competitive positioning in the direct-to-consumer eyewear market over the next several quarters.

High‑Margin Contact Lens Growth

Rapid expansion of a high‑margin, repeatable product line materially improves gross margin mix and recurring revenue. If sustained, category growth can drive long‑term margin expansion and stabilize cash flows given habitual purchase behavior for contact lenses.

Negative Factors

Low Net Profit Margin

A thin net margin limits retained earnings and the firm's capacity to self‑fund larger strategic initiatives or absorb shocks. Even with revenue growth, persistently low net profitability reduces cushion for sustained marketing spend or margin pressure from competitive pricing.

Moderate Cash Conversion

Low operating cash conversion relative to reported income suggests earnings are not fully translating into liquid cash. That constrains internal funding for expansion and increases reliance on external capital if aggressive growth or inventory investments continue.

Tempered U.S. Expansion

Pausing or dialing back U.S. investment limits access to a much larger addressable market and slows geographic diversification. Prolonged regulatory uncertainty or underinvestment could constrain long‑term growth potential and increase reliance on the Canadian market.

Kits Eyecare Business Overview & Revenue Model

Company Description

Kits Eyecare Ltd. operates a digital eyecare platform for eyes in the United States and Canada. The company manufactures progressive and contact lenses, eyeglasses, and frames under the KITS brand, as well as distributes eyewear products of various brands. It operates through a network of optical e-commerce websites, including KITS.com, KITS.ca, OptiContacts.com, and ContactsExpress.ca. The company was incorporated in 2018 and is headquartered in Vancouver, Canada.

How the Company Makes Money

Kits Eyecare generates revenue primarily through the sale of prescription eyewear, including glasses and contact lenses, as well as non-prescription sunglasses. The company operates on a direct-to-consumer model, which allows it to offer competitive pricing by eliminating middlemen costs. Key revenue streams include the sale of eyewear products and potential subscription services for contact lenses. Additionally, KITS may form partnerships with eyewear manufacturers and optical labs to enhance its product offerings and streamline supply chain operations, thereby contributing to its earnings. Marketing strategies, such as targeted advertising and promotions, also play a crucial role in driving sales and customer acquisition.

Kits Eyecare Financial Statement Overview

Summary

Kits Eyecare demonstrates strong revenue growth and operational efficiency, with a stable balance sheet and improved cash flow generation. However, the net profit margin remains low, indicating room for profitability enhancement.

Income Statement

Kits Eyecare has demonstrated a strong revenue growth trajectory, with a 5.75% increase in the TTM period. The gross profit margin has improved to 35.64%, indicating efficient cost management. However, the net profit margin remains relatively low at 2.06%, suggesting room for improvement in profitability. The EBIT and EBITDA margins have shown positive trends, reflecting better operational efficiency.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.13, indicating low leverage and financial stability. The return on equity has improved to 6.53%, showing better utilization of shareholder funds. The equity ratio stands at 62.73%, reflecting a strong equity base. Overall, the balance sheet is stable, with manageable debt levels.

Cash Flow

Kits Eyecare has achieved a significant free cash flow growth of 38.29% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.26, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio of 0.68 highlights a solid ability to generate cash relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	193.40M	159.34M	120.51M	91.64M	82.40M	75.22M
Gross Profit	69.31M	53.65M	40.79M	29.25M	20.89M	21.39M
EBITDA	11.73M	8.31M	1.86M	-721.00K	-14.25M	-1.80M
Net Income	5.58M	3.12M	-2.21M	-4.55M	-14.62M	-6.58M
Balance Sheet
Total Assets	98.85M	103.02M	87.64M	93.86M	90.94M	54.66M
Cash, Cash Equivalents and Short-Term Investments	19.69M	19.27M	16.04M	18.79M	20.50M	2.31M
Total Debt	7.21M	12.60M	15.39M	19.44M	22.94M	22.33M
Total Liabilities	36.85M	45.13M	36.20M	40.16M	36.16M	55.23M
Stockholders Equity	62.00M	57.89M	51.45M	53.71M	54.78M	-573.00K
Cash Flow
Free Cash Flow	7.57M	9.88M	1.84M	4.42M	-23.09M	3.96M
Operating Cash Flow	8.81M	13.04M	2.40M	4.68M	-19.46M	4.18M
Investing Cash Flow	-1.23M	-3.15M	-563.00K	-258.00K	-3.63M	-225.00K
Financing Cash Flow	-6.41M	-5.02M	-5.07M	-5.13M	41.48M	-4.84M

Kits Eyecare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 20.29 is below the 20-day moving average (MA) of 20.42, above the 50-day MA of 17.89, and above the 200-day MA of 15.50, indicating a neutral trend. The MACD of 0.65 indicates Positive momentum. The RSI at 56.48 is Neutral, neither overbought nor oversold. The STOCH value of 32.40 is Neutral, 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
LNF	81 Outperform	C$1.89B	10.80	15.07%	3.11%	1.99%	31.36%
ATD	77 Outperform	C$65.19B	18.41	17.53%	1.08%	2.25%	4.76%
KITS	72 Outperform	C$654.70M	115.61	9.68%	―	32.31%	―
PET	65 Neutral	C$1.88B	19.62	106.59%	1.72%	5.09%	14.05%
CTC	64 Neutral	C$9.06B	16.89	13.16%	3.17%	-0.13%	13.73%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ECOM	57 Neutral	C$17.19M	33.82	―	―	24.43%	―

Kits Eyecare Corporate Events

KITS Eyecare Boosts Liquidity with New Lending Facility and Loan Repayment

KITS Eyecare has established a new three-year Asset-Based Lending facility with the Bank of Montreal, providing a borrowing capacity of $15 million, which can be increased to $20 million. This move enhances KITS’ liquidity, adding to its existing $19.7 million cash balance, and supports its growth strategy. Concurrently, the company has fully repaid its Business Development Bank of Canada term loan ahead of schedule, leaving it with no outstanding long-term debt. This financial maneuvering positions KITS for further investment and expansion in the North American market, reinforcing its status as a major player in the consumer eyecare industry.

The most recent analyst rating on (TSE:KITS) stock is a Buy with a C$22.00 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 Growth in Q3 2025

Kits Eyecare Ltd. reported a record third quarter in 2025, with a 25.1% increase in revenue year-over-year, reaching $52.4 million. The company also saw a significant rise in net income to $1.9 million and an improvement in adjusted EBITDA by 79% to $2.9 million. This growth is attributed to strategic pricing, an improved product mix, and targeted promotions. With over 1 million active customers and a 36.5% increase in new customers, Kits Eyecare is positioned for sustained momentum and profitability, reflecting disciplined execution in its operations.

The most recent analyst rating on (TSE:KITS) stock is a Hold with a C$15.50 price target. To see the full list of analyst forecasts on Kits Eyecare stock, see the TSE:KITS Stock Forecast page.