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On Wednesday, Warby Parker Inc. (NYSE:WRBY) saw its price target increased by Citi from $17.00 to $22.00, while the firm retained a Neutral rating on the stock. This adjustment comes in the wake of Warby Parker’s announcement of a partnership with tech giant Google (NASDAQ:GOOGL) to develop artificial intelligence-powered glasses suitable for all-day wear. Following the news, Warby Parker shares surged approximately 16%, bringing the stock to $20.34. According to InvestingPro data, the company, currently valued at $2.47 billion, has demonstrated strong financial health with more cash than debt on its balance sheet.
The collaboration involves a commitment from Google of up to $75 million to support the development and commercialization of the new glasses. A portion of this funding is available immediately, with the rest to be allocated as Warby Parker progresses towards commercialization. Additionally, Warby Parker has the option to issue up to $75 million in equity to Google at its discretion. The specifics of the financial terms between the two companies have not been disclosed. The company’s revenue has grown by ~14% over the last twelve months, and InvestingPro analysis suggests the stock is currently trading above its Fair Value.
Warby Parker’s upcoming product is set to compete with EssilorLuxottica’s Ray-Ban Meta (NASDAQ:META) glasses, which have been on the market since September 2023 and have already sold over 2 million units. The new AI-powered glasses developed by Warby Parker and Google are expected to be released sometime in 2026.
Citi’s revised price target reflects the potential growth opportunities for Warby Parker arising from this strategic partnership. The significant investment and the innovative nature of the product could position Warby Parker as a notable player in the wearable technology market.
In other recent news, Warby Parker Inc. has announced a strategic partnership with Google to develop AI-powered eyewear. This collaboration represents Google’s first venture into the eyewear industry and includes a financial commitment of up to $150 million, split between product development and a potential equity investment in Warby Parker. The companies plan to launch their initial line of smart glasses post-2025, featuring both prescription and non-prescription lenses. Meanwhile, Warby Parker’s first-quarter financial results have prompted several analyst actions. UBS has lowered its price target for Warby Parker to $20, citing potential impacts from tariff policies, while maintaining a Neutral rating. Telsey Advisory Group also reduced its price target to $22, retaining an Outperform rating and highlighting Warby Parker’s market share growth and cost controls. Evercore ISI similarly adjusted its price target to $22, maintaining an In Line rating due to mixed earnings results and macroeconomic uncertainties. Despite these revisions, Warby Parker reported a first-quarter revenue increase of 11.9% year-over-year, reaching $223.8 million, though slightly below market expectations.
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