Warby Parker Inc. (NYSE:WRBY) Released Earnings Last Week And Analysts Lifted Their Price Target To US$20.38

Shareholders of Warby Parker Inc. (NYSE:WRBY) will be pleased this week, given that the stock price is up 12% to US$19.51 following its latest third-quarter results. It was a pretty bad result overall; while revenues were in line with expectations at US$192m, statutory losses exploded to US$0.03 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Warby Parker

After the latest results, the 14 analysts covering Warby Parker are now predicting revenues of US$867.7m in 2025. If met, this would reflect a solid 17% improvement in revenue compared to the last 12 months. Warby Parker is also expected to turn profitable, with statutory earnings of US$0.085 per share. Before this earnings report, the analysts had been forecasting revenues of US$860.3m and earnings per share (EPS) of US$0.085 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 19% to US$20.38despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Warby Parker's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Warby Parker analyst has a price target of US$23.00 per share, while the most pessimistic values it at US$17.00. This is a very narrow spread of estimates, implying either that Warby Parker is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Warby Parker'shistorical trends, as the 13% annualised revenue growth to the end of 2025 is roughly in line with the 14% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.8% per year. So although Warby Parker is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Warby Parker going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Warby Parker that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.