Warby Parker’s shares fell nearly 63% last year. Goldman Sachs is only assessing the short-term risks to Warby Parker, which boasts a beaten up glasses retailer. Brooke Roach, analyst at Goldman Sachs stated in a note that she has lost confidence in the company’s ability to generate revenue. “Several earnings reports where revenue growth and profitability forecasts have failed to meet our expectations have led to us losing faith in their outlook. This is driving more balance in risk/reward and less potential for valuation,” Brooke Roach wrote to clients. Roach downgraded stock from neutral to buy, and cut the price target for the bank to $18 per share from $34 a year. The bank’s original call to sell the stock had been “wrong”, she said. This new target suggests an upside of only 3% over Tuesday’s closing prices. Roach indicated that Warby can benefit from and gain market share over the long term as it increases its brick and mortar store locations. But, Roach noted that a challenging macro-environment and other factors create a longer-dated path for profit growth. We don’t believe there is an opportunity for valuation growth given the below-guide revenues and EBITDA projections. We believe that valuation will stay range-bound, given the elevated execution risk in dynamic environments with rising rates. — CNBC’s Michael Bloom contributed reporting.
