Morgan Stanley analyst Alexandra Straton maintained a Hold rating on Warby Parker (WRBY – Research Report) today and set a price target of $16.00.
Alexandra Straton’s rating is based on several factors that contribute to a cautious outlook for Warby Parker’s stock. The company’s financial profile shows low conviction, particularly in its near-term and steady-state growth and profitability. This uncertainty is compounded by significant adjustments to EBITDA and unclear profit and loss implications due to its evolving business model. Additionally, there is a noticeable gap between Warby Parker’s long-term growth algorithm and its current performance, which adds to the uncertainty.
Moreover, the recent first-quarter sales and gross margin miss, along with a reduction in full-year guidance, have likely dampened the emerging positive outlook for the company’s growth and margin expansion opportunities. The combination of these factors, along with the company’s volatile track record and a highly uncertain macroeconomic environment, suggests that the stock may remain range-bound at its current valuation. Therefore, Alexandra Straton maintains a Hold rating, reflecting a cautious stance on Warby Parker’s future performance.
In another report released today, Roth MKM also maintained a Hold rating on the stock with a $18.00 price target.
Based on the recent corporate insider activity of 44 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of WRBY in relation to earlier this year.