WRBY

Warby Parker is a genuinely improving business. The loss ladder has narrowed every year — from -$144M (2021) to -$63.2M (2023) to -$20.4M (2024) — and FY2025 crossed into the black at +$1.64M net income on $872M revenue (+13% YoY). More telling than the razor-thin GAAP profit is the cash and EBITDA picture management leans on: Adjusted EBITDA grew to $95.2M (10.9% margin) from $73.1M (9.5%) and $52.4M (7.8%), operating cash flow was $111M against $67M capex (~$44M free cash flow), and the balance sheet is clean — $286M cash, equity of $368M, liabilities/equity of 0.96x and no signs of debt stress. Unit economics are scaling: 323 stores (47 net new, 88% offering eye exams) and 2,689k active customers (+7%). The Q2-2025 Google partnership — up to $75M for product development plus up to $75M of potential equity investment toward AI glasses — is real, funded optionality that already offset $3.3M of SG&A in 2025.

The problem is price, not quality. GAAP operating income is still negative (-$5.34M, -0.6% margin) and net margin is 0.2%, so the P/E of 3011 is meaningless; the stock has to be underwritten on EBITDA and growth. At a $3.69B market cap that's roughly 36x EV/Adjusted EBITDA and ~84x free cash flow — full multiples that demand the EBITDA-margin march continues. Notably, gross margin actually slipped to 54.0% from 55.3% in 2024, and MD&A attributes 2025 cost volatility to tariffs and 'evolving international trade policies,' with the China-diversification and domestic-lab buildout still in progress. So the model is improving but not yet self-evidently durable at this price.