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On Friday, JMP Securities analyst Nicholas Jones increased the price target on Warby Parker Inc. (NYSE:WRBY) to $30.00, up from the previous $28.00, while maintaining a Market Outperform rating on the company’s shares. According to InvestingPro data, this target represents the highest among analysts, with consensus targets ranging from $20 to $30. This adjustment followed Warby Parker’s announcement of its fourth-quarter results for 2024, which showed a revenue figure slightly above consensus and adjusted EBITDA that aligned with expectations from Wall Street. The company currently trades at an EV/EBITDA multiple of 184x, suggesting a premium valuation.
Warby Parker’s shares experienced a rise of approximately 3% after the company released its earnings report. The fourth quarter marked a period of significant achievements for Warby Parker, including the highest revenue growth quarter since 2021 and an acceleration in active customer growth. The company also succeeded in expanding its margins, maintaining a healthy gross profit margin of 55.3%. InvestingPro analysis reveals impressive momentum, with the stock delivering a 90% return over the past year and a 63% gain in the last six months. Get access to 10+ additional ProTips and comprehensive financial metrics with InvestingPro.
The eyewear retailer provided guidance for the first quarter of 2025 and for the full year, which matched the market’s forecasts. With revenue growth of 15.2% in the last twelve months and analysts expecting profitability this year, Warby Parker shows promising momentum. Analyst Nicholas Jones expressed satisfaction with Warby Parker’s quarterly performance, highlighting the company’s strategic moves that contributed to its positive outcomes.
A notable development for Warby Parker is its newly announced partnership with retail giant Target (NYSE:TGT, NC). This collaboration is expected to offer a considerable opportunity for Warby Parker to increase its active customer base and, consequently, its revenue, due to Target’s extensive consumer reach.
Looking ahead into 2025, JMP Securities anticipates that Warby Parker will continue to grow its active customer numbers and revenue per customer. The firm also projects that Warby Parker will be able to expand its profit margins by at least 100-200 basis points. The recent results and guidance provided by Warby Parker are not seen as altering the fundamental investment thesis for the company.
In other recent news, Warby Parker Inc. reported its fourth-quarter 2024 earnings, revealing a significant 17.8% revenue growth year-over-year, reaching $190.6 million. Despite this impressive revenue increase, the company’s earnings per share (EPS) fell short of expectations, recording -$0.06 compared to the anticipated $0.03. The company’s retail revenue notably outpaced its e-commerce growth, with a 23.9% increase in the quarter. Warby Parker plans to continue expanding its physical presence by opening 45 new stores in 2025, including five shop-in-shops within Target stores, as part of its strategy to enhance retail accessibility.
In an analyst update, Evercore ISI maintained its In Line rating on Warby Parker and raised the stock price target from $23.00 to $24.00, following the company’s strong earnings performance and future earnings projections. The firm acknowledged catalysts such as active customer growth and EBITDA margin expansion as potential growth accelerators. Warby Parker’s management has projected a minor impact on gross margins due to tariff exposure, with China accounting for 20% of the company’s total cost of goods sold.
Additionally, Warby Parker is focusing on strategic marketing investments and expanding its insurance business, which saw a transformative year with the integration of Versant Health. The company expects this integration to drive long-term growth by expanding its in-network coverage and increasing average revenue per member. These developments reflect Warby Parker’s commitment to sustainable growth and its strategic initiatives to drive customer acquisition and enhance its market presence.
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