Warby Parker stock retains buy rating at TD Cowen on market share growth

Investing.com - TD Cowen maintained its buy rating and $24.00 price target on Warby Parker Inc. (NYSE:WRBY), currently trading at $21.92 with a market capitalization of $2.59 billion, in a research note released Monday.

The firm cited Warby Parker’s growing and profitable market share, accelerating active customer growth driven by higher ROI marketing, and significant opportunity through its Google (NASDAQ:GOOGL) Glass partnership as key factors supporting the rating. The company has demonstrated strong momentum with revenue reaching $795.09 million, growing at ~14% year-over-year.

TD Cowen highlighted the eyewear retailer’s compelling revenue retention that drives high customer lifetime value, while noting potential upside given what it called "cautious guidance on macro & tariffs."

The research firm pointed to Warby Parker’s consistent EBITDA margin expansion, which aligns with the company’s long-term target of 100-200 basis points of expansion per year, and its achievement of GAAP profitability in the first quarter.

TD Cowen outlined a path to achieving low to mid-teens percentage revenue growth through store expansion from 276 locations in fiscal year 2024 toward a target of 900, e-commerce growth representing approximately 30% of sales, and comparable sales growth.

In other recent news, Warby Parker Inc. has announced a significant partnership with Google to develop AI-powered glasses, a move that has drawn attention from multiple analyst firms. Piper Sandler raised its price target for Warby Parker to $25, citing the collaboration’s potential to expand the company’s total addressable market. The firm also maintained an Overweight rating, noting Google’s financial backing as a key factor. Similarly, Loop Capital maintained a Buy rating with a $27 target, viewing the partnership as a promising development for Warby Parker’s future earnings, although not a core investment thesis.

Stifel also adjusted its outlook, increasing the price target to $21 while keeping a Hold rating due to execution risks. The analysts emphasized Warby Parker’s potential to enhance its brand perception through this collaboration. Citi raised its price target to $22, maintaining a Neutral rating, and highlighted the strategic partnership’s growth opportunities. The collaboration involves a substantial financial commitment from Google, including up to $75 million for development and commercialization, with Warby Parker having the option to issue equity to Google.

The partnership aims to position Warby Parker in the growing wearable technology market, with plans for product commercialization beyond 2025. Analysts are optimistic about the potential sales impact, with Piper Sandler estimating a $30-60 million opportunity and incremental sales growth. The market will be closely watching for further developments as Warby Parker integrates Google’s technology and prepares for the anticipated release of the AI-powered glasses in 2026.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.