Warby Parker (WRBY) Stock Forecast & Price Target

Warby Parker is well positioned for future growth due to several factors including strong revenue growth driven by pent-up demand, an improved macroeconomic environment, and investments in marketing and product initiatives, as well as the potential for transformative partnerships such as the upcoming launch of AI-powered glasses with Google. With a long runway ahead and outsized traction with younger customers, Warby Parker has established proof of concept and continues to gain market share from industry leaders and independents. Although there are risks such as macroeconomic deterioration, pricing competition, and brand deterioration, we remain positive on the company's potential for sustainable profitable growth and maintain our Outperform rating with a price target of $34.

Warby Parker is facing multiple headwinds that may result in contraction in gross margins by 25+ basis points in 2026, such as increasing occupancy and optometrist costs, tariffs, and rising competition from other eyewear providers. Their recent appointment of Adrian Mitchell as CFO may bring some positive changes, but the company is still underpenetrated compared to its peers, and its strategic opportunities in insurance, optometrists, and contact lenses are in early stages. Additionally, the company may face margin deleverage with its focus on expanding into the AI glasses market, even with the backing of partners like Google and Samsung.