Warby Parker is rated at Hold by Stifel due to the near-term costs of growth

Mar. 31, 2022 8:01 AM ETWarby Parker Inc. (WRBY)By: Clark Schultz, SA News Editor

Eyewear Company Warby Parker Becomes Public Company Traded On The NYSE

Scott Olson/Getty Images News

Stifel initiated coverage of Warby Parker (NYSE:WRBY) with a Hold rating on a view the path to strong revenue growth for the online glasses retailer will be capital intensive in the near term.

Warby Parker (WRBY) is noted to bring a differentiated approach to comprehensive vision care and at just 13% brand awareness in the U.S. market, the brand is seen being early in development.

Analyst Jim Duffy: "Compelling digital economics and retail expansion opportunity suggest a long-runway for 20% or better growth and margin expansion. Growth is becoming more retail dependent, however, increasing capital intensity limiting cash conversion for the next 3-5 yrs. With open-ended growth potential and opportunity for margin leverage with scale, we see it appropriate to take a long-view on valuation but the capital intensity of the model keeps us guarded on multiple assumptions."

Duffy warned that WRBY has capital expenditures planned at a high-single digit percent of revenue to support growth, which could limit cash conversion for the next 3 to 5 years.

Wall Street ratings scorecard on Warby Parker (WRBY): 5 Buy-equivalent ratings, 4 Hold-equivalent ratings and no Sell-equivalent ratings.

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.