William Blair analyst Dylan Carden has maintained their bullish stance on WRBY stock, giving a Buy rating yesterday.
Dylan Carden has given his Buy rating due to a combination of factors that indicate a positive outlook for Warby Parker. The company is expected to report strong first-quarter earnings, with trends showing improvement throughout the quarter, particularly in March. This suggests the potential to surpass market expectations. A key focus remains on maintaining a stable gross margin in the mid-50% range, despite the impact of increased tariffs from China. If Warby Parker can sustain its gross margin excluding these additional costs, it would demonstrate resilience against the shift towards lower-margin revenue streams such as contact lenses and eye exams.
Furthermore, the company’s shares are valued attractively at 13.5 times the adjusted EBITDA estimate for 2026, with projections of 13.8% revenue growth and improved operating margins. This growth trajectory is supported by a broader recovery in the eyeglass repurchase cycle, which could drive significant earnings growth over the next two years. While prolonged inflation could pose a risk by dampening demand, the essential nature of the product, coupled with Warby Parker’s strong brand presence, helps mitigate this concern.
In another report released yesterday, BTIG also maintained a Buy rating on the stock with a $24.00 price target.