Warby Parker (WRBY) AI Stock Analysis

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Warby Parker

(NYSE:WRBY)

Rating:75Outperform

Price Target:

$22.50

▲(4.26%Upside)

Warby Parker's overall stock score reflects strong revenue growth and strategic initiatives, particularly the partnership with Google. Positive earnings call outcomes and technical momentum are tempered by profitability challenges and valuation concerns. The company's focus on innovation and expansion supports a favorable future outlook.

Positive Factors

Financial Investment

Google has committed up to $150M for the partnership, with up to $75M as an equity investment and up to another $75M for Warby Parker's product development and commercialization costs.

Strategic Partnership

The partnership with Google validates Warby Parker's position in the market and its status as a formidable and growing player in the eyewear industry.

Negative Factors

Financial Performance

The first quarter sales and gross margin miss and full-year guidance reduction likely dampen the emerging bullish thesis focusing on Warby Parker's attractive topline growth and margin expansion opportunity.

Growth Uncertainty

Uncertainty in Warby Parker's growth and profitability profile is driven by substantial add-backs to adjusted EBITDA and unclear implications of its evolving business model.

Warby Parker (WRBY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.62B

Dividend YieldN/A

Average Volume (3M)2.94M

Price to Earnings (P/E)―

Beta (1Y)1.39

Revenue Growth13.94%

EPS Growth74.69%

CountryUS

Employees2,218

SectorHealthcare

Sector Strength42

IndustryMedical - Instruments & Supplies

Share Statistics

EPS (TTM)0.15

Shares Outstanding104,502,620

10 Day Avg. Volume1,843,182

30 Day Avg. Volume2,941,604

Financial Highlights & Ratios

PEG Ratio-2.93

Price to Book (P/B)6.51

Price to Sales (P/S)0.00

P/FCF Ratio63.47

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$22.00

Price Target Upside1.95% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

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 through the sale of eyewear products, including prescription eyeglasses, sunglasses, and contact lenses. The company operates a vertically integrated business model, which allows it to design, produce, and sell its products directly to consumers, thus reducing reliance on intermediaries and keeping prices competitive. Warby Parker also offers an online Home Try-On program, enabling customers to try frames before purchasing. The company's retail stores, which enhance its omnichannel presence, contribute significantly to its sales. Additionally, Warby Parker has developed strategic partnerships and collaborations to expand its product offerings and reach. Revenue is primarily driven by product sales, supported by marketing initiatives and customer loyalty programs.

Warby Parker Key Performance Indicators (KPIs)

Any

Store Count

Store Count
Indicates the number of physical locations, reflecting the company's retail footprint and potential market reach. A growing store count can signal expansion efforts and increased brand presence.

Chart InsightsWarby Parker's aggressive store expansion strategy is evident, with a consistent increase in store count each quarter. The company opened 41 new stores in 2024 and plans to add 45 more in 2025, including a strategic partnership with Target. This expansion aligns with their robust revenue growth and improved EBITDA margins. Despite challenges like lower margins in contact lenses and weather-impacted guidance, Warby Parker's focus on insurance and eye care, alongside positive e-commerce trends, positions them well for continued growth and market penetration.

Data provided by:

Main Street Data

Warby Parker Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 33.54%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

Warby Parker demonstrated strong performance in key areas such as revenue growth, profitability, and customer acquisition despite challenges posed by tariffs and economic uncertainty. The company's strategic initiatives, including store expansion and supply chain diversification, position it well for future growth, although external factors like tariffs and consumer sentiment remain concerns.

Q1-2025 Updates

Positive Updates

Revenue Growth

Warby Parker achieved a 12% year-over-year revenue growth, reflecting a consistent 2-year stack growth. Q1 2025 revenue was $223.8 million, up 11.9% year-over-year.

Adjusted EBITDA Margin Expansion

The company reported an adjusted EBITDA margin of 13.1%, marking nearly 200 basis points of year-over-year expansion.

Positive GAAP Net Income

Warby Parker achieved its first quarter of positive GAAP net income as a public company.

Active Customer Growth

The company delivered seven consecutive quarters of accelerating active customer growth, ending Q1 with 2.57 million active customers, an 8.7% year-over-year increase.

Store Expansion

Warby Parker opened 11 new stores in Q1, the highest number ever for a first quarter, with plans to open 45 new stores in 2025.

E-commerce Growth

E-commerce revenue increased 5.5% year-over-year, achieving its highest quarterly growth since 2021.

Contact Lens and Eye Care Growth

Contact lens revenue grew 25.1% and eye care grew approximately 40% year-over-year.

Negative Updates

Tariff Impact

Warby Parker is facing increased tariff rates of 145% for China and 10% for the rest of the world, which could impact gross margin by approximately 200 to 300 basis points for the full year 2025.

Moderate Revenue Outlook Adjustment

The company adjusted its full-year 2025 revenue growth estimate from 14-16% to 13-15%, reflecting a more conservative outlook due to increased uncertainty around consumer spending.

Weather Disruptions

Q1 operations faced significant weather disruptions, losing 68% more operational hours due to weather compared to the previous year.

Company Guidance

During the Warby Parker First Quarter 2025 Earnings Call, the company reported a 12% year-over-year revenue growth and an adjusted EBITDA margin of 13.1%, marking a nearly 200 basis point expansion from the previous year. They achieved their first quarter of positive GAAP net income as a public company. Warby Parker's strategic priorities focus on customer experience and acquisition, as evidenced by seven consecutive quarters of accelerating active customer growth. They plan to continue investing in marketing, aiming for marketing expenses to be in the low-teens as a percent of revenue. The company is also adjusting to tariff impacts by diversifying their supply chain and implementing selective price increases, with a goal to reduce their China sourcing from 20% to less than 10% of COGS by the end of the year. Additionally, Warby Parker is expanding its omnichannel model, planning to open 45 new stores in 2025, including shop-in-shops with Target. For the full year, they project net revenue of $869 million to $886 million, with an adjusted EBITDA margin of 10.5% to 11%.

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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Very Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Positive

Last Price21.58

Price Trends

50DMA

17.45

Positive

100DMA

20.67

Positive

200DMA

19.91

Positive

Market Momentum

MACD

1.10

Negative

RSI

64.68

Neutral

STOCH

70.54

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WRBY, the sentiment is Positive. The current price of 21.58 is above the 20-day moving average (MA) of 19.59, above the 50-day MA of 17.45, and above the 200-day MA of 19.91, indicating a bullish trend. The MACD of 1.10 indicates Negative momentum. The RSI at 64.68 is Neutral, neither overbought nor oversold. The STOCH value of 70.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 2 New Risks

We may not be successful in our retail growth and vision care expansion strategy. Q4, 2024

The use of artificial intelligence could adversely affect our business. Q4, 2024

Warby Parker Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WRBY	75 Outperform	$2.62B	―	-4.25%	―	13.94%	74.69%
BLCO	57 Neutral	$4.13B	―	-5.56%	―	11.94%	-6.98%
Sector *	54 Neutral	$5.31B	3.29	-45.39%	2.79%	16.77%	-0.07%
LUCY	35 Underperform	$8.88M	―	-132.93%	―	41.99%	47.51%

* Healthcare Sector Average

Performance Comparison

WRBY

Warby Parker

21.58

4.71

27.92%

BLCO

Bausch + Lomb Corporation

11.70

-3.31

-22.05%

LUCY

Innovative Eyewear, Inc.

2.87

-7.93

-73.43%

Warby Parker Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy

Warby Parker Partners with Google for AI Glasses

Positive

May 20, 2025

On May 20, 2025, Warby Parker announced a partnership with Google to develop AI-powered glasses designed for all-day wear, marking Google’s first eyewear partnership for Android XR. Google has committed up to $150 million to the partnership, which includes an equity investment in Warby Parker. This collaboration aims to combine Warby Parker’s eyewear design expertise with Google’s technology to create a new generation of smart glasses, potentially enhancing Warby Parker’s market position and offering innovative products to consumers.

The most recent analyst rating on (WRBY) stock is a Hold with a $20.00 price target. To see the full list of analyst forecasts on Warby Parker stock, see the WRBY Stock Forecast page.

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.