Four key developments mean that Warby Parker is likely to increase its revenue growth and expand its margins in 2024, according to Evercore ISI. The firm upgraded shares of the eyeglass retailer to outperform from in-line performance. It also issued a price target to $20, implying more than 50% upside from Monday’s close of $13.27. Analyst Mark Mahaney thinks 2024 will be a “fundamental inflection year” for the eyewear company’s revenue growth reacceleration and margin expansion. He cited consistent growth in the sales of progressives lenses, a ramp up in store openings, the reacceleration of marketing spending and the steady increase of repeat customers using multiple services as key drivers of this theme. The analyst added that positive survey results and an attractive valuation and risk-reward outlook warranted Evercore’s increase of Warby Parker’s earnings estimates above consensus. “We view WRBY’s valuation as highly attractive vs. comps, on a growth-adjusted basis,” Mahaney said. “A highly competitive optical vision market and some uncertainty over WRBY’s long-term sustained profitability potential remain real risks, but we see these risks as more than fully reflected in current valuation.” Shares of Warby Parker are little changed this year, sliding 1.6%. Over the past three months, however, the stock has rallied more than 11%, while the S & P 500 dipped 3.7%. WRBY YTD mountain WRBY in 2023 — CNBC’s Michael Bloom contributed to this report
