Kits Eyecare (KITS) AI Stock Analysis

• Market Cap: C$423.56M
• Dividend Yield: N/A
• Average Volume (3M): 53.64K
• Price to Earnings (P/E): 110.4
• Beta (1Y): 0.97
• 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: 32,136,215
• 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$25.90
• Price Target Upside: 47.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: C$18.50 ▲(5.11% Upside)

Kits Eyecare's strong financial performance, particularly in revenue growth and profitability, is a major positive factor. The bullish technical indicators are tempered by overbought signals, and the high P/E ratio suggests overvaluation. The positive earnings call sentiment further supports the stock's prospects, despite some market challenges.

Positive Factors

Revenue Growth

Sustained revenue growth indicates strong market demand and effective business strategies, enhancing long-term financial stability.

Customer Growth

Significant customer growth suggests increasing brand recognition and market penetration, supporting future revenue expansion.

Product Innovation

Strong growth in proprietary products enhances competitive advantage and margin sustainability, driving long-term profitability.

Negative Factors

Cash Flow Concerns

Declining cash flow generation can limit investment capacity and operational flexibility, posing risks to long-term growth.

U.S. Market Challenges

Challenges in the U.S. market could hinder expansion efforts and revenue diversification, affecting future growth prospects.

Modest Profit Margins

Low net profit margins indicate limited profitability, which could impact reinvestment capabilities and shareholder returns.

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 improved profitability metrics, indicating positive business momentum. The balance sheet shows reduced leverage and strong equity, enhancing financial stability. However, cash flow generation has weakened, highlighting a need for improved cash management.

Income Statement

Kits Eyecare has shown a strong revenue growth rate of 6.85% in the TTM, indicating robust sales expansion. The gross profit margin has improved to 35.64%, reflecting efficient cost management. However, the net profit margin remains modest at 2.06%, suggesting room for profitability enhancement. The EBIT and EBITDA margins are relatively low, at 3.73% and 5.12% respectively, indicating potential for operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio has decreased to 0.13, reflecting a conservative leverage position and reduced financial risk. Return on equity has improved to 6.53%, indicating better utilization of shareholder funds. The equity ratio stands at 62.76%, showcasing a strong equity base relative to total assets, which enhances financial stability.

Cash Flow

Free cash flow has declined by 12.45% in the TTM, which is a concern for cash generation. 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 indicates that a significant portion of earnings is being converted into free cash flow, although there is room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	182.88M	159.34M	120.51M	91.64M	82.40M	75.22M
Gross Profit	65.18M	53.65M	40.79M	29.25M	20.89M	21.39M
EBITDA	9.37M	8.31M	1.86M	-721.00K	-14.25M	-1.80M
Net Income	3.77M	3.12M	-2.21M	-4.55M	-14.62M	-6.58M
Balance Sheet
Total Assets	94.26M	103.02M	87.64M	93.86M	90.94M	54.66M
Cash, Cash Equivalents and Short-Term Investments	18.11M	19.27M	16.04M	18.79M	20.50M	2.31M
Total Debt	7.72M	12.60M	15.39M	19.44M	22.94M	22.33M
Total Liabilities	35.09M	45.13M	36.20M	40.16M	36.16M	55.23M
Stockholders Equity	59.17M	57.89M	51.45M	53.71M	54.78M	-573.00K
Cash Flow
Free Cash Flow	5.48M	9.88M	1.84M	4.42M	-23.09M	3.96M
Operating Cash Flow	8.10M	13.04M	2.40M	4.68M	-19.46M	4.18M
Investing Cash Flow	-2.61M	-3.15M	-563.00K	-258.00K	-3.63M	-225.00K
Financing Cash Flow	-6.62M	-5.02M	-5.07M	-5.13M	41.48M	-4.84M

Kits Eyecare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.60
• 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 17.6 is above the 20-day moving average (MA) of 15.04, above the 50-day MA of 14.87, and above the 200-day MA of 14.07, indicating a bullish trend. The MACD of 0.73 indicates Negative momentum. The RSI at 73.45 is Negative, neither overbought nor oversold. The STOCH value of 91.87 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
LNF	81 Outperform	C$2.02B	12.56	15.07%	3.05%	1.99%	31.36%
KITS	68 Neutral	C$423.56M	110.39	9.68%	―	32.31%	―
GBT	63 Neutral	C$420.15M	15.61	5.60%	2.90%	7.20%	-33.22%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ECOM	60 Neutral	C$11.96M	-33.33	―	―	24.43%	―
NTAR	49 Neutral	C$31.03M	―	―	―	-59.22%	83.08%

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.

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.