Kits Eyecare (TSE:KITS)
TSX:KITS
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Kits Eyecare
(TSX:KITS)
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Rating:64Neutral
Price Target:
C$17.00
▲(7.53% Upside)
Action:DowngradedDate:03/06/26
The score is driven primarily by improving financial performance (profitability and cash-flow turnaround) and a positive earnings update with continued growth and margin progress. Offsetting these positives are weak technicals (broadly below key moving averages with negative MACD) and a very high P/E that increases valuation risk.
Positive Factors
Sustained Revenue & Customer Scale
Sustained top-line scale and accelerating customer additions signal durable demand and improving unit economics. A growing active base (1M+) reduces reliance on single purchases, spreads marketing fixed costs, and supports repeat revenue, enhancing long-term growth and margin resilience.
Negative Factors
Thin Net Profitability
Low single‑digit net margins leave limited cushion against cost inflation, promotional pressure, or higher fulfilment expenses. Small margin buffers increase the risk that short to medium-term headwinds could erase profits and impair free cash flow consistency.
Read all positive and negative factors
Positive Factors
Negative Factors
Sustained Revenue & Customer Scale
Sustained top-line scale and accelerating customer additions signal durable demand and improving unit economics. A growing active base (1M+) reduces reliance on single purchases, spreads marketing fixed costs, and supports repeat revenue, enhancing long-term growth and margin resilience.
Read all positive factors
Kits Eyecare (KITS) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$537.33M
Dividend YieldN/A
Average Volume (3M)53.64K
Price to Earnings (P/E)188.9
Beta (1Y)1.16
Revenue Growth32.31%
EPS GrowthN/A
CountryCA
Employees162
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.06
Shares Outstanding33,986,810
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$24.58Price Target Upside55.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.27
Revenue Forecast (FY)C$250.20M
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 variou...
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 competiti...
Kits Eyecare Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 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
70
Positive
Balance Sheet
74
Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 202.46M | 159.34M | 120.51M | 91.64M | 82.40M |
| Gross Profit | 71.28M | 53.65M | 40.79M | 29.25M | 20.89M |
| EBITDA | 10.64M | 8.31M | 1.86M | -721.00K | -14.25M |
| Net Income | 3.11M | 3.12M | -2.21M | -4.55M | -14.62M |
Balance Sheet | |||||
| Total Assets | 112.96M | 103.02M | 87.64M | 93.86M | 90.94M |
| Cash, Cash Equivalents and Short-Term Investments | 33.67M | 19.27M | 16.04M | 18.79M | 20.50M |
| Total Debt | 15.82M | 12.60M | 15.39M | 19.44M | 22.94M |
| Total Liabilities | 50.65M | 45.13M | 36.20M | 40.16M | 36.16M |
| Stockholders Equity | 62.31M | 57.89M | 51.45M | 53.71M | 54.78M |
Cash Flow | |||||
| Free Cash Flow | 11.33M | 9.88M | 1.84M | 4.42M | -23.09M |
| Operating Cash Flow | 11.46M | 13.04M | 2.40M | 4.68M | -19.46M |
| Investing Cash Flow | -5.13M | -3.15M | -563.00K | -258.00K | -3.63M |
| Financing Cash Flow | 3.47M | -5.02M | -5.07M | -5.13M | 41.48M |
Kits Eyecare Technical Analysis
Negative
15.81
Price Trends
17.51
Negative
17.15
Negative
16.43
Negative
Market Momentum
-0.59
Negative
50.98
Neutral
89.84
Negative
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 15.81 is above the 20-day moving average (MA) of 14.83, below the 50-day MA of 17.51, and below the 200-day MA of 16.43, indicating a neutral trend. The MACD of -0.59 indicates Negative momentum. The RSI at 50.98 is Neutral, neither overbought nor oversold. The STOCH value of 89.84 is Negative, 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 |
|---|---|---|---|---|---|---|---|
67 Neutral | C$72.21B | 15.86 | 17.36% | 1.08% | 2.25% | 4.76% | |
67 Neutral | C$1.82B | 12.20 | 13.08% | 3.11% | 1.99% | 31.36% | |
64 Neutral | C$537.33M | 188.91 | 9.68% | ― | 32.31% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | C$14.20M | 106.09 | ― | ― | 24.43% | ― | |
57 Neutral | C$1.47B | 19.75 | 106.59% | 1.72% | 5.09% | 14.05% | |
55 Neutral | C$10.04B | 16.32 | 13.16% | 3.17% | -0.13% | 13.73% |
* Consumer Cyclical Sector Average
TSE:KITS
Kits Eyecare
15.81
3.73
30.88%
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Kits Eyecare Corporate Events
Business Operations and StrategyFinancial Disclosures
Kits Eyecare Hits Record 2025 Revenue as Eyeglasses and AI Platform Drive Growth
Positive
Mar 4, 2026
Kits Eyecare reported record 2025 results, with annual revenue rising 27.1% to $202.5 million, gross margin expanding to 35.6%, and adjusted EBITDA climbing 82.6% to $11.7 million while delivering over 426,000 pairs of glasses. The company achieve...
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.