Warby Parker (Warby Parker (WRBY)) shares got a nice lift Monday as investors piled into growth stocks and the consumer discretionary sector led the market higher. The Nasdaq gained 1.34%, and the S&P 500 rose 1.12%. But the real spark came from Bank of America, which initiated coverage on the eyewear retailer with a Buy rating and a $33 price target, saying the company has "plenty more than meets the eye."
That $33 target implies about 13% upside from Monday's share price of $29.24. BofA based its valuation on 23x enterprise value-to-EBITDA, citing expectations for double-digit revenue growth and 100 to 200 basis points of annual EBIT margin expansion.
AI Glasses and Sports Eyewear: New Growth Levers
Warby Parker is best known for its $95 prescription glasses, but BofA sees the company expanding well beyond that core offering. The analysts highlighted the planned launch of Google- and Samsung-powered AI glasses, starting with audio-only smart glasses in late 2026, followed by display-enabled devices. Importantly, potential AI glasses revenue isn't included in the company's current guidance, so any sales there would be pure upside.
The brokerage also pointed to Warby Parker's new sports eyewear collection, broader contact lens and frame offerings, and a revamped "Add a Pair and Save" promotion as ways to boost average order values and margins.
Insurance and Eye Exams: The Hidden Growth Engine
BofA expects Warby Parker's eye care business to become a bigger piece of the pie. Eye exams made up about 7% of sales in the first quarter, and exam revenue jumped 30% year over year. According to the report, customers who get exams spend more over their lifetime than those who just buy glasses.
Insurance adoption is also picking up. Insurance-backed orders rose to 10% of revenue in the first quarter, up from 8.3% in 2025. The company's new out-of-network reimbursement tool should make it easier for insured customers to use their benefits at Warby Parker, which could drive even more traffic.
Warby Parker currently operates 337 stores and plans to open 50 more in 2026, with a long-term goal of 900 locations. BofA estimates the company holds only about 1% to 2% of the U.S. optical market, leaving plenty of room to grab share.
Risks to Watch
It's not all rosy, of course. BofA noted that near-term investments in eye exams, additional optical labs, doctor hiring, and AI glasses could pressure margins. Macroeconomic uncertainty, limited in-network insurance partnerships, and intense competition are also risks to keep an eye on.
Technical Picture: Bullish Momentum
Warby Parker's stock is looking strong from a technical perspective. It's trading 14.1% above its 20-day simple moving average and 22.2% above its 200-day moving average. The 20-day moving average remains above the 50-day, and the golden cross that formed in June continues to support the longer-term bullish trend.
Momentum indicators are also constructive. The MACD is above its signal line, and the positive histogram suggests buying momentum is strengthening. The stock is approaching the upper end of its 52-week range after establishing a higher low in April and a swing high in May. Key resistance sits at $30.50, with support near $24.50.
Price Action
Warby Parker shares were up 1.20% at $29.59 at the time of publication Monday, approaching its 52-week high of $31.00.
