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Warby Parker, Inc. Class A (WRBY)
:WRBY
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Warby Parker
(NYSE:WRBY)
67Neutral
Positive Factors
Partnership Opportunities
The newly announced partnership with Target potentially unlocks a significant opportunity to grow its active customer base, and ultimately top line, given Target's wide reach.
Revenue Growth
Warby Parker accelerated active customer growth, achieving its highest revenue growth quarter since 2021, while also expanding margins.
Negative Factors
Market Valuation
The stock has risen 50% over the past 3 months to a level believed to be overvalued.
Store Performance
Store sales volumes are lower than originally planned, and sales growth has significantly lagged store growth since 2021.
Valuation Concerns
The stock is trading at a very high 28x EV/EBITDA, which is considered a negative factor.
Warby Parker (WRBY) vs. S&P 500 (SPY)
Market Cap
$1.91B
Dividend YieldN/A
Average Volume (3M)2.67M
Price to Earnings (P/E)―
Beta (1Y)1.50
Revenue Growth15.16%
EPS Growth68.55%
CountryUS
Employees2,218
SectorHealthcare
Sector Strength77
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)-0.17
Shares Outstanding103,622,990
10 Day Avg. Volume2,074,394
30 Day Avg. Volume2,671,716
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.96
Price to Cash Flow (P/CF)28.70
P/FCF Ratio28.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$27.38Price Target Upside73.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Warby Parker Business Overview & Revenue Model
Company DescriptionWarby Parker Inc. provides eyewear products. It offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, and contact lenses, as well as accessories, including cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray. The company also offers eye exams and vision tests directly to consumers through its retail stores, website, and mobile apps. As of May 16, 2022, it had 160 retail stores in the United States and Canada. The company was formerly known as JAND, Inc. and changed its name to Warby Parker Inc. in June 2021. Warby Parker Inc. was incorporated in 2009 and is headquartered in New York, New York.
How the Company Makes MoneyWarby Parker generates revenue primarily through the direct sale of eyewear products, including prescription glasses, sunglasses, and contact lenses, both online and in physical retail locations. The company's vertically integrated model allows it to design, manufacture, and sell its products directly to consumers, which helps in maintaining competitive pricing. Warby Parker's revenue streams are bolstered by its 'Home Try-On' program, enhancing customer engagement and conversion rates. Additionally, the company leverages its retail stores to offer personalized services and eye exams, further driving sales. While Warby Parker does not rely on significant partnerships for revenue, its focus on customer experience and brand loyalty plays a crucial role in its earnings.
Warby Parker Financial Statement Overview
Summary
Warby Parker is experiencing healthy revenue growth and improved cash flow, demonstrating strong operational performance. However, continued net losses and negative profit margins suggest challenges remain in achieving profitability. The balance sheet is solid, with a good equity position and manageable debt levels, supporting future growth potential. Overall, the financials indicate a company on a positive trajectory but still facing profitability hurdles.Income Statement
Warby Parker has shown significant revenue growth with a 15.15% increase from 2023 to 2024, indicating strong market demand. The gross profit margin improved to 55.34% in 2024, reflecting efficient cost management. However, the company is still operating at a net loss, with a negative net profit margin of -2.64%, though this is an improvement from previous years. The EBIT and EBITDA margins remain negative, suggesting ongoing operational challenges.75
Positive
Balance Sheet
The company's debt-to-equity ratio is 0.66, indicating a balanced leverage position. The equity ratio of 50.28% suggests a strong equity base relative to total assets. Return on equity improved but is still negative at -5.99%, highlighting the need for better profitability. Overall, the balance sheet shows financial stability with ample cash reserves.80
Positive
Cash Flow
Warby Parker's cash flow is robust, with a significant increase in operating cash flow to $98.74 million in 2024. The free cash flow grew to $34.71 million, a notable improvement. The operating cash flow to net income ratio is strong at 4.84, indicating effective cash management. Free cash flow to net income is also positive, reflecting the company's ability to generate cash despite net losses.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 771.32M | 669.76M | 598.11M | 540.80M | 393.72M | Gross Profit |
| 426.83M | 365.22M | 341.06M | 317.75M | 231.94M | EBIT |
| -30.11M | -72.00M | -111.20M | -143.66M | -55.63M | EBITDA |
| -30.11M | -33.44M | -78.03M | -121.70M | -37.26M | Net Income Common Stockholders |
| -20.39M | -63.20M | -110.39M | -144.27M | -55.92M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 254.16M | 216.89M | 208.59M | 256.42M | 314.08M | Total Assets |
| 676.49M | 580.31M | 568.71M | 440.65M | 444.75M | Total Debt |
| 225.35M | 174.46M | 173.38M | 0.00 | 0.00 | Net Debt |
| -28.81M | -42.44M | -35.21M | -256.42M | -314.08M | Total Liabilities |
| 336.42M | 278.52M | 282.06M | 154.65M | 136.34M | Stockholders Equity |
| 340.07M | 301.79M | 286.65M | 286.00M | 308.41M |
| Cash Flow | Free Cash Flow | |||
| 34.71M | 7.32M | -49.81M | -80.51M | 12.69M | Operating Cash Flow |
| 98.74M | 60.99M | 10.37M | -31.99M | 32.76M | Investing Cash Flow |
| -66.03M | -54.67M | -60.18M | -48.51M | -20.07M | Financing Cash Flow |
| 4.96M | 2.87M | 3.29M | 23.00M | 245.94M |
Warby Parker Technical Analysis
Negative
15.78
Price Trends
22.60
Negative
23.35
Negative
19.49
Negative
Market Momentum
-1.33
Negative
34.45
Neutral
29.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WRBY, the sentiment is Negative. The current price of 15.78 is below the 20-day moving average (MA) of 18.85, below the 50-day MA of 22.60, and below the 200-day MA of 19.49, indicating a bearish trend. The MACD of -1.33 indicates Negative momentum. The RSI at 34.45 is Neutral, neither overbought nor oversold. The STOCH value of 29.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WRBY.
Warby Parker Risk Analysis
Warby Parker disclosed 66 risk factors in its most recent earnings report. Warby Parker reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Warby Parker Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Performance Comparison
WRBY
Warby Parker
15.49
2.06
15.34%
BLCO
Bausch + Lomb Corporation
11.87
-4.55
-27.71%
LUCY
Innovative Eyewear, Inc.
1.86
-3.97
-68.10%
Warby Parker Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -33.59% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Warby Parker's robust revenue growth, expansion plans, and strategic initiatives in insurance and eye care, indicating strong business momentum. While there are some challenges such as lower margins in the contact lens category and weather-impacted guidance, the positive achievements and growth strategies largely outweigh these concerns.Highlights
Record Revenue Growth
Warby Parker reported its highest revenue growth quarter since 2021, with a full-year revenue increase of over 15% and a fourth-quarter revenue rise of 17.8% year-over-year.
Expansion of Store Network
41 new stores were opened in 2024, with plans to open 45 more in 2025, including a partnership with Target to open five shop-in-shops.
Strong Growth in Insurance and Eye Exams
Insurance business expanded with in-network coverage to over 30 million lives. Eye exam revenue grew over 40% year-over-year, contributing to higher average revenue per customer.
Improved Adjusted EBITDA Margin
Adjusted EBITDA margin expanded by approximately 170 basis points, with a 40% increase in adjusted EBITDA versus 2023.
Positive Trends in E-commerce
E-commerce revenue grew for the first time since 2021, with a 5.3% increase in Q4 and a full-year increase of 3%.
Lowlights
Continued Lower Gross Margin from Contact Lenses
Contact lenses, while contributing to gross profit dollars, have a lower gross margin percentage compared to other product categories.
Weather Impact on Q1 2025 Guidance
Recent weather conditions have impacted trends, reflected in a cautious Q1 2025 guidance with estimated revenue growth of 12% to 13%.
Company Guidance
In Warby Parker's Fourth Quarter 2024 Earnings Call, the company reported a strong performance with revenue growth of 15.2% for the full year and 17.8% in Q4, marking it as their highest revenue growth quarter since 2021. The company expanded its adjusted EBITDA margins by approximately 170 basis points and achieved a 40% increase in adjusted EBITDA compared to 2023. Warby Parker opened 41 new stores and maintained positive e-commerce growth for the first time since 2021. The company also focused on expanding its insurance business, growing contacts and exams by 36% and 41% respectively, and increasing in-network coverage to over 30 million lives. For 2025, Warby Parker plans to continue its growth trajectory by opening 45 new stores, scaling its insurance business, and leveraging a data-driven media mix model to optimize marketing spend, which is expected to remain in the low teens as a percent of revenue. The company anticipates achieving 14% to 16% revenue growth with an adjusted EBITDA margin of approximately 11% at the midpoint, aiming for an additional 150 basis points of margin expansion.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.