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Warby Parker (WRBY)
NYSE:WRBY
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Warby Parker
(NYSE:WRBY)
66Neutral
Positive Factors
Customer Metrics
Sequential improvements in active customer growth and improvement in revenue per customer were bright spots.
Revenue Growth
Retail sales improved by 14.8% and there was an acceleration in e-commerce growth, which is the highest quarterly growth since 2021.
Tariff Mitigation
Management is quickly implementing strategies to offset the impact of tariffs through mitigation and expense management.
Negative Factors
Financial Guidance
Limited conviction in Warby Parker's near-term and beyond financial profile due to a lower-quality first quarter beat and full-year guidance cut.
Growth and Profitability
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.
Macroeconomic Conditions
Warby Parker's unclear trajectory and volatile track record, combined with an uncertain macro backdrop, could keep the stock range-bound at current levels.
Warby Parker (WRBY) vs. S&P 500 (SPY)
Market Cap
$2.15B
Dividend YieldN/A
Average Volume (3M)2.86M
Price to Earnings (P/E)―
Beta (1Y)1.46
Revenue Growth13.94%
EPS Growth74.69%
CountryUS
Employees2,218
SectorHealthcare
Sector Strength38
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)0.15
Shares Outstanding104,502,620
10 Day Avg. Volume3,122,569
30 Day Avg. Volume2,859,875
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
$21.14Price Target Upside19.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Warby Parker Business Overview & Revenue Model
Company DescriptionWarby Parker Inc. (WRBY) is an American eyewear company that specializes in selling prescription glasses, sunglasses, and contact lenses. Founded in 2010, the company aims to provide high-quality eyewear at an affordable price by circumventing traditional retail channels and designing its products in-house. Warby Parker operates primarily through its e-commerce platform while also maintaining a network of retail stores across the United States and Canada. The company is recognized for its innovative 'Home Try-On' program, which allows customers to try several frames at home before making a purchase.
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 Key Performance Indicators (KPIs)
Any
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.
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.
Data provided by:
Main Street Data
Main Street DataWarby 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
Positive
17.71
Price Trends
17.30
Positive
21.36
Negative
19.48
Negative
Market Momentum
0.21
Negative
54.83
Neutral
59.73
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 17.71 is above the 20-day moving average (MA) of 16.38, above the 50-day MA of 17.30, and below the 200-day MA of 19.48, indicating a neutral trend. The MACD of 0.21 indicates Negative momentum. The RSI at 54.83 is Neutral, neither overbought nor oversold. The STOCH value of 59.73 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 0 New Risks
Warby Parker Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Performance Comparison
WRBY
Warby Parker
17.71
1.02
6.11%
BLCO
Bausch + Lomb Corporation
11.76
-2.75
-18.95%
LUCY
Innovative Eyewear, Inc.
2.80
-0.98
-25.93%
Warby Parker Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 9.59%|
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%.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.