William Blair starts Warby Parker at Market Perform amid ‘blind spots’

William Blair initiated coverage of Warby Parker with a Market Perform rating and no price target. The stock’s current valuation does not fully reflect the ultimate earnings power of Warby’s model, given its lower than initially planned revenue growth and “further blind spots” from a lack of detailed retail segment disclosure and lower structural gross margins, the analyst tells investors in a research note. The firm sees a “tangible growth opportunity” through further retail expansion and would look to get more positive on the shares with greater visibility into new store performance and gross margin stabilization. The largest risk for Warby shareholders is potential volatility created as these metrics “find a level,” the analyst tells investors in a research note.