Kits Eyecare (TSE:KITS)
TSX:KITS
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Kits Eyecare
(TSX:KITS)
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Rating:60Neutral
Price Target:
C$15.00
▼(-1.25% Downside)
Action:Reiterated
Date:06/05/26
The score is supported primarily by improving fundamentals (growth, profitability turnaround, and a conservatively levered balance sheet), but is held back by thin margins and a notable recent drop in free cash flow. Mixed technicals and an expensive valuation (very high P/E with no dividend yield) further limit the overall score.
Positive Factors
Sustained Revenue Growth
Kits has delivered multi-year top-line expansion (2022–2025 plus positive TTM growth). Persistent revenue momentum in a DTC eyecare model supports scale economies, better absorption of fixed costs, and durable demand that underpins longer-term margin improvement and investment capacity.
Negative Factors
Thin Operating & Net Margins
Margins remain thin despite revenue gains, leaving earnings highly sensitive to cost inflation, marketing spend, and pricing pressure. Small adverse swings in CAC, input or fulfillment costs could materially erode profitability and slow progress toward durable high-return economics.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Revenue Growth
Kits has delivered multi-year top-line expansion (2022–2025 plus positive TTM growth). Persistent revenue momentum in a DTC eyecare model supports scale economies, better absorption of fixed costs, and durable demand that underpins longer-term margin improvement and investment capacity.
Read all positive factors
Kits Eyecare (KITS) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$433.44M
Dividend YieldN/A
Average Volume (3M)53.64K
Price to Earnings (P/E)123.3
Beta (1Y)1.34
Revenue Growth24.65%
EPS Growth-28.30%
CountryCA
Employees162
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.11
Shares Outstanding33,995,464
10 Day Avg. Volume77,427
30 Day Avg. Volume53,639
Financial Highlights & Ratios
PEG Ratio-103.69
Price to Book (P/B)9.43
Price to Sales (P/S)2.90
P/FCF Ratio51.86
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$21.46Price Target Upside41.27% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.26
Revenue Forecast (FY)C$244.32M
Kits Eyecare Business Overview & Revenue Model
Company Description
Kits Eyecare Ltd. operates an online vision care platform that serves customers throughout the United States and Canada. The company produces its own range of KITS-branded products, encompassing progressive and contact lenses, as well as spectacle...
How the Company Makes Money
KITS makes money primarily by selling optical products directly to consumers through its online platform. Key revenue streams include: (1) Prescription eyewear sales: revenue generated from selling prescription eyeglasses (frames and prescription ...
Kits Eyecare Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call presented strong, broad-based growth across revenue, product mix, and recurring revenue with improving gross margins and sustained profitability and cash generation. Key growth engines—glasses (including AI glasses), contact lenses, KITS Dailies, and retail—show accelerating traction and higher-margin mix. Management acknowledged some near-term margin noise from supplier rebate timing, sequential moderation in new contacts, elevated marketing investment, and the early-stage nature of AI glasses and retail expansion. Overall, the positives — robust top-line growth, margin expansion, recurring revenue strength, product innovation, and strong cash/ balance sheet metrics — materially outweigh the noted risks and modest near-term execution uncertainties.Positive Updates
Record Revenue and Strong Top-Line Growth
Q4 revenue increased 20% year-over-year to $53.9 million; full-year 2025 revenue grew 27% to $202.5 million.
Negative Updates
Gross Margin Volatility from Supplier Rebate Timing
Management noted Q4 gross margin (35%) was affected by the timing of supplier rebates; while underlying margins were said to be stable, this timing noise created quarter-to-quarter variability.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue and Strong Top-Line Growth
Q4 revenue increased 20% year-over-year to $53.9 million; full-year 2025 revenue grew 27% to $202.5 million.
Read all positive updates
Company Guidance
Kits guided Q1 FY2026 revenue of $58–$60 million, calling for roughly $10.5 million from glasses and $48 million from contact lenses (implying glasses ≈17–18% and contacts ≈80–83% of the quarter), with gross margins of approximately 35%; near‑term priorities are to accelerate glasses and AI‑glasses growth, strengthen contact‑lens retention, expand Progressive Readers and further integrate OpticianAI across the funnel, while management also plans a Toronto flagship in spring 2026 and the launch of Pangolin Gen‑4 in 2026.Kits Eyecare Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
84
Very Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 213.33M | 202.46M | 159.34M | 120.51M | 91.64M | 82.40M |
| Gross Profit | 77.95M | 71.28M | 53.65M | 40.79M | 29.25M | 20.89M |
| EBITDA | 10.00M | 10.64M | 8.31M | 1.86M | -721.00K | -14.25M |
| Net Income | 3.48M | 3.11M | 3.12M | -2.21M | -4.55M | -14.62M |
Balance Sheet | ||||||
| Total Assets | 107.53M | 112.96M | 103.02M | 87.64M | 93.86M | 90.94M |
| Cash, Cash Equivalents and Short-Term Investments | 21.98M | 33.67M | 19.27M | 16.04M | 18.79M | 20.50M |
| Total Debt | 5.63M | 15.82M | 12.60M | 15.39M | 19.44M | 22.94M |
| Total Liabilities | 37.62M | 50.65M | 45.13M | 36.20M | 40.16M | 36.16M |
| Stockholders Equity | 69.91M | 62.31M | 57.89M | 51.45M | 53.71M | 54.78M |
Cash Flow | ||||||
| Free Cash Flow | 5.82M | 11.33M | 9.88M | 1.84M | 4.42M | -23.09M |
| Operating Cash Flow | 6.00M | 11.46M | 13.04M | 2.40M | 4.68M | -19.46M |
| Investing Cash Flow | -5.18M | -5.13M | -3.15M | -563.00K | -258.00K | -3.63M |
| Financing Cash Flow | -162.00K | 3.47M | -5.02M | -5.07M | -5.13M | 41.48M |
Kits Eyecare Technical Analysis
Negative
15.19
Price Trends
13.44
Negative
15.27
Negative
15.81
Negative
Market Momentum
0.15
Positive
44.71
Neutral
24.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KITS, the sentiment is Negative. The current price of 15.19 is above the 20-day moving average (MA) of 13.32, above the 50-day MA of 13.44, and below the 200-day MA of 15.81, indicating a bearish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 44.71 is Neutral, neither overbought nor oversold. The STOCH value of 24.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:KITS.
Kits Eyecare Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | C$75.70B | 19.81 | 17.65% | 1.08% | -0.34% | 7.11% | |
63 Neutral | C$1.67B | 10.82 | 12.69% | 3.11% | 1.41% | -3.11% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | C$433.44M | 123.35 | 5.50% | ― | 24.65% | -28.30% | |
60 Neutral | C$9.86B | 16.43 | 10.24% | 3.17% | 0.86% | -26.59% | |
57 Neutral | C$1.25B | 13.11 | 117.77% | 1.72% | 6.18% | 8.58% | |
55 Neutral | C$13.24M | -48.14 | ― | ― | 39.58% | 83.15% |
* Consumer Cyclical Sector Average
TSE:KITS
Kits Eyecare
12.75
-0.97
-7.07%
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24.31
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-6.68%
TSE:CTC
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TSE:ECOM
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0.03
87.50%
TSE:PET
Pet Valu Holdings Ltd.
18.33
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-42.29%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.