Warby Parker Inc. Fundamental Analysis (NYSE: WRBY)
Warby Parker Inc. (NYSE: WRBY) shows weak financial fundamentals with a PE ratio of 407.90, profit margin of 0.85%, and ROE of 2.06%. The company generates $0.9B in annual revenue with strong year-over-year growth of 13.04%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 39.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze WRBY's fundamental strength across five key dimensions:
Efficiency Score
WeakWRBY struggles to generate sufficient returns from assets.
Valuation Score
ModerateWRBY shows balanced valuation metrics.
Growth Score
ModerateWRBY shows steady but slowing expansion.
Financial Health Score
ExcellentWRBY maintains a strong and stable balance sheet.
Profitability Score
ModerateWRBY maintains healthy but balanced margins.
Key Financial Metrics
Is WRBY Expensive or Cheap?
P/E Ratio
WRBY trades at 407.90 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, WRBY's PEG of 0.11 indicates potential undervaluation.
Price to Book
The market values Warby Parker Inc. at 8.49 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 42.11 times EBITDA. This signals the market has high growth expectations.
How Well Does WRBY Make Money?
Net Profit Margin
For every $100 in sales, Warby Parker Inc. keeps $0.85 as profit after all expenses.
Operating Margin
Core operations generate 0.17 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $2.06 in profit for every $100 of shareholder equity.
ROA
Warby Parker Inc. generates $1.00 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Warby Parker Inc. produces operating cash flow of $94.42M, showing steady but balanced cash generation.
Free Cash Flow
Warby Parker Inc. generates weak or negative free cash flow of $21.53M, restricting financial flexibility.
FCF Per Share
Each share generates $0.18 in free cash annually.
FCF Yield
WRBY converts 0.65% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
407.90
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.11
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.49
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.61
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.64
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.27
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.02
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.003
vs 25 benchmark
How WRBY Stacks Against Its Sector Peers
| Metric | WRBY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 407.90 | 26.74 | Worse (Expensive) |
| ROE | 2.06% | 965.00% | Weak |
| Net Margin | 0.85% | -4914.00% (disorted) | Weak |
| Debt/Equity | 0.64 | 0.61 | Neutral |
| Current Ratio | 2.27 | 2.31 | Strong Liquidity |
| ROA | 1.00% | 295.00% | Weak |
WRBY outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Warby Parker Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
101.09%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
102.66%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
207.10%
Industry Style: Cyclical, Growth, Discretionary
High Growth