2023-05-24 11:01:22 ET
Warby Parker’s ( NYSE: WRBY ) upside in disrupting the eyewear industry is balanced by macro concerns, according to JMP Securities.
A team of analysts including Nicholas Jones, Luke Meindl and Timothy Shubsda highlighted the somewhat discretionary nature of eyeglass purchases and upgrades. As such, consumer spending patterns could be hampered by the darkening macro backdrop, especially at the stock’s current valuation, the trio explained.
“Given the high fragmentation of the vertical, we are confident WRBY can continue deploying its omnichannel direct-to-consumer playbook, providing consumers a compelling e-commerce channel while rolling out more storefronts in the U.S., to gain market share,” the team acknowledged. “However, given prior lofty investor expectations for top-line growth, its recent slowdown in customer growth has weighed on the stock's valuation. Though prescription eyeglasses can be considered somewhat non-discretionary, a consumer may not need to purchase new glasses if their prescription has not changed.”
The team initiated coverage of WRBY with a Market Perform rating and declined to assign a price target.
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Warby Parker started at Hold by JMP Securities