Analysts have reduced their average price target for Warby Parker from approximately $25.08 to $22.17. They cite slower revenue growth trends and ongoing concerns about near-term topline outlook and retail risks.
Analyst Commentary
Street research following the recent results at Warby Parker reveals a mix of cautious and optimistic perspectives. Analysts have weighed in on the company's current valuation, revenue trends, and growth execution, resulting in both supportive and skeptical viewpoints.
Bullish Takeaways
- Some analysts continue to see long-term growth potential for Warby Parker, highlighting the company's ability to deliver solid adjusted EBITDA even in the face of revenue setbacks.
- The reaffirmation of the full-year EBITDA outlook has been noted as a positive sign for operational execution and cost management.
- Supporters point to sustained buy recommendations, with some optimism that the company can recover its growth trajectory over time.
Bearish Takeaways
- Cautious analysts emphasize the continued slowdown in revenue trends, particularly highlighting recent declines in younger consumer engagement and the impact on topline growth.
- There are growing concerns around the persistence of these weak sales trends into upcoming quarters, raising doubts about a near-term recovery in topline performance.
- Current premium valuations are being questioned by several research notes, with skepticism that investors are adequately compensated given potential risks to retail economics and the pace of multiple improvement.
- Overall, uncertainty has increased regarding Warby Parker's ability to deliver consistent mid-teens or higher revenue growth, which is seen as necessary to justify current share prices.
What's in the News
- The company issued updated earnings guidance for full year 2025, projecting net revenue of $871 million to $874 million. This would represent growth of approximately 13% (Key Developments)
- The company announced a three-year partnership with Texas Longhorns quarterback Arch Manning. The partnership includes new eyewear collections, a commercial debut, and local Austin community initiatives through the Pupils Project vision program (Key Developments)
Valuation Changes
- Consensus Analyst Price Target: Lowered from $25.08 to $22.17, reflecting a more cautious outlook on shares.
- Discount Rate: Increased slightly from 8.41% to 8.44%, suggesting modestly higher perceived risk.
- Revenue Growth: Reduced from 14.6% to 12.9%, indicating tempered expectations for top-line expansion.
- Net Profit Margin: Improved from 6.35% to 8.36%, pointing to expectations of better bottom-line profitability.
- Future P/E: Dropped significantly from 51.4x to 34.8x, implying a less optimistic view of forward earnings valuation.
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