Warby Parker Inc. (NYSE: WRBY) has suddenly gone from sleepy eyewear retailer to one of the market’s more intriguing AI-adjacent stories.
On December 8–9, 2025, Warby Parker shares spiked more than 13–16% in heavy trading, climbing from the high teens to around $22–23 per share, after Google publicly confirmed that its first pair of AI-powered glasses co-developed with Warby Parker is slated to launch in 2026. [1]
At a recent price of about $22.33 and a market capitalization near $3.4 billion, investors are now asking the obvious question: after this surge, does WRBY still offer upside, or has the market already priced in the new AI story?
Why Warby Parker Stock Is Surging in December 2025
Google confirms 2026 AI smart glasses launch
The immediate catalyst for the move was Google’s announcement at The Android Show | XR Edition that its first lightweight, AI-powered smart glasses developed with Warby Parker are expected to debut in 2026. [2]
According to Google and Warby Parker:
- The glasses will be built on Google’s Android XR platform and use the Gemini AI model for multimodal intelligence.
- The roadmap includes two device types:
- “AI glasses” with audio and visual sensors for screen‑free AI assistance.
- “Display AI glasses” with an in‑lens display for private access to navigation, translations and other information. [3]
- Warby Parker stresses a lightweight, all‑day‑wear design rather than bulky headsets.
This announcement is the first firm public timeline since the companies unveiled their partnership earlier in 2025, and it effectively places Warby Parker inside the same competitive arena as Meta’s Ray‑Ban smart glasses and Apple’s Vision Pro ecosystem. [4]
The ripple effects are already visible: shares of EssilorLuxottica, owner of Ray‑Ban and one of the biggest global eyewear players, fell around 4–5% as investors digested the prospect of more intense competition in AI-enabled eyewear from the Google–Warby Parker–Samsung cluster. [5]
A deep-pocketed partner: up to $150 million from Google
This 2026 launch builds on a May 2025 strategic agreement, where Google committed up to $150 million to the collaboration:
- Up to $75 million to fund Warby Parker’s product development and commercialization costs.
- An additional $75 million in a potential equity investment in Warby Parker, contingent on hitting certain milestones. [6]
That commitment both validates Warby Parker as a design and distribution partner and gives the company financial firepower to pursue what management calls its AI‑driven “next act.”
Hedgeye’s “10‑Bagger” Call Adds Fuel
The AI news isn’t the only thing pushing WRBY higher.
On December 9, research firm Hedgeye called Warby Parker “the retail stock to own in 2026” and argued the name could be a “10‑bagger” over the next five years, starting from roughly $20 per share. [7]
Key points from Hedgeye’s thesis:
- Warby Parker’s balance sheet is described as “stellar,” with room to invest in an international footprint. [8]
- The firm sees significant white space for global expansion beyond the current North American store base. [9]
Following this commentary, WRBY shares climbed again, with some intraday reports showing the stock up around 8–16% on Monday’s session alone, supported by trading volume well above average. [10]
Under the Hood: Q3 2025 Earnings and a Turn to Profitability
The rally sits on top of a slowly improving fundamental story.
Solid top-line growth, first clean profit
For the third quarter of 2025 (ended September 30):
- Net revenue: $221.7 million, up 15.2% year‑over‑year. [11]
- Active customers: 2.66 million, up 9.3% on a trailing 12‑month basis.
- Average revenue per customer: $320, up 4.8% year‑over‑year. [12]
- Gross margin: about 54.1%, slightly below last year due to tariffs, contact lens mix and shipping costs. [13]
- Net income: $5.9 million, versus a $4.1 million loss in the prior‑year quarter.
- GAAP diluted EPS:$0.05, compared with a loss of $0.03 a year earlier. [14]
- Adjusted EBITDA: $25.7 million, for an 11.6% margin. [15]
Warby Parker ended Q3 with $280.4 million in cash and cash equivalents and year‑to‑date free cash flow of $35.6 million, signaling that the model is beginning to throw off cash even as the company invests in growth. [16]
Store footprint and omnichannel mix
Warby Parker’s growth remains heavily store‑driven:
- The company finished Q3 with 313 stores, on track to open about 45 net new stores in 2025. [17]
- E‑commerce still matters, but now represents roughly 27% of revenue, with brick‑and‑mortar accounting for the majority of sales. [18]
That omnichannel model is central to the AI glasses strategy: smart eyewear will likely require hands‑on fitting, demos and prescription integration, making Warby’s physical store fleet a key competitive asset versus purely online or electronics-first rivals.
2025 guidance: slightly moderated growth, better margins
Despite the Q3 rally, Warby Parker has actually tempered its growth ambitions for 2025 while leaning harder into profitability:
- 2025 net revenue guidance: $871–$874 million, implying about 13% full‑year growth. [19]
- Adjusted EBITDA guidance: $98–$101 million, or 11.3–11.6% margins. [20]
Industry coverage describes this as Warby Parker entering a “third act” of innovation—one defined by AI‑driven services and smart glasses—while accepting more moderate short‑term sales growth in exchange for better margins and disciplined execution. [21]
What Wall Street Thinks About WRBY Now
Consensus price targets: modest upside after the spike
Analyst forecasts have been moving around as the stock rerates:
- Across a broad sample of firms, 12‑month consensus price targets cluster around $24–$25 per share, with some datasets quoting an average near $24.5. [22]
- High targets reach about $31, while the low end sits near $20. [23]
From today’s price near $22–23, that implies roughly 10% upside on average—hardly a screaming bargain, but not fully priced for perfection either.
Some platforms that aggregate analyst views (such as Public.com) still show a “Buy” consensus, with a 2025 price prediction in the mid‑$20s range. [24]
MarketBeat’s latest roundup, however, notes that the overall rating mix is closer to neutral, with roughly nine Buy ratings and ten Hold ratings, and an average target of $24.53. [25]
Hedgeye and the ultra-bullish long-term view
Overlaying the Wall Street consensus is Hedgeye’s far more aggressive claim that WRBY could become a 10‑bagger over five years if management successfully uses its “stellar” balance sheet to build an international brand around both traditional eyewear and AI smart glasses. [26]
That would require:
- Sustained double‑digit revenue growth,
- Significant margin expansion, and
- A smooth 2026+ rollout of AI glasses that actually resonates with mainstream consumers.
In other words: a lot has to go right.
Options Traders Are Making Big, Short-Term Bets
The derivatives market is echoing the excitement around WRBY.
- On December 8, traders bought 50,003 call options on Warby Parker—a roughly 3,467% increase over the typical daily call volume of about 1,400 contracts. [27]
- That surge in call activity coincided with the stock jumping about 15–16% to around $21.70, on volume more than double its average. [28]
One GuruFocus analysis highlighted a specific trade in 12/12 weekly 22 calls that nearly doubled in value—from $0.29 to $0.57—producing an estimated profit of about $168,000 on a $172,000 position. [29]
At the same time, Warby Parker’s:
- Short interest stands near 7–8% of the float,
- Institutional ownership is above 90%, and
- Various research outlets describe WRBY as a potential short‑squeeze candidate if bullish momentum persists. [30]
The takeaway: sentiment has swung sharply bullish in the short term, but part of that move is being driven by speculative options activity, not just long‑only investors quietly building positions.
Valuation Check: How Expensive Is WRBY After the Rally?
Even after the AI premium, Warby Parker is still effectively a low‑margin retailer with a national store base, not a pure‑software AI company. That matters for valuation.
Based on current data:
- Market cap: roughly $3.4 billion.
- Guided 2025 revenue: $871–$874 million. [31]
That implies a price‑to‑sales multiple just under 4x 2025 revenue—high for a retailer, but not insane if Warby can sustain mid‑teens growth and gradually push margins higher.
On earnings metrics:
- Trailing net margin is still around 0.1%, and
- TTM P/E ratios reported by data vendors are in the hundreds to thousands, because profits are only just emerging. [32]
GuruFocus, for example, flags WRBY as a speculative growth profile, with:
- P/S a bit above 3x on trailing numbers,
- Operating margin still slightly negative,
- A solid current ratio and Altman Z‑score, but
- Noticeable insider selling (roughly 250k+ shares) in recent months. [33]
In short: WRBY is not cheap on traditional value metrics. The bull case is about where the margins and revenue can go, not where they are today.
Strategic Upside: More Than Just Glasses
Warby Parker’s story today spans three overlapping themes:
- Core optical retail
- Designer‑quality eyeglasses and contacts at accessible price points, sold through an omnichannel network of 300+ stores and online. [34]
- A strong brand, heavily millennial and Gen‑Z focused, with a social mission (over 15–20 million pairs of glasses distributed to people in need through its Buy a Pair, Give a Pair program). [35]
- Healthcare & services
- Eye exams and vision services delivered through in‑store optometrists and digital tools.
- Growing integration with insurance networks and medical billing. [36]
- AI and smart eyewear
If the 2026 AI glasses succeed, Warby Parker could evolve from a niche DTC retailer into one of the more recognizable AI‑hardware lifestyle brands, sitting at the intersection of design, healthcare and everyday computing.
That is the optionality the market is starting to price in.
Key Risks to the Bull Case
Despite the excitement, several risks remain front and center:
- Execution risk on AI glasses
- Smart eyewear has a long history of consumer indifference (remember Google Glass).
- Mass adoption will depend on comfort, battery life, privacy acceptance, fashion appeal and price—none of which we know yet. [39]
- Competitive pressure
- Meta, Apple, Samsung, Gentle Monster and others are all racing to define the next wave of AR/AI glasses. [40]
- Warby Parker’s advantage in design and retail could be offset by tech giants’ deeper hardware and chip expertise.
- Still-thin profitability
- Warby is barely profitable on a GAAP basis; a few weak quarters, higher tariffs, or mis‑timed inventory bets could push it back into losses. [41]
- Leadership transition in finance
- Longtime CFO Steven Miller left in late 2025 to join Monumental Sports & Entertainment, with co‑CEO Dave Gilboa assuming interim finance leadership. [42]
- A high‑growth, AI‑heavy roadmap will require strong financial discipline; investors will watch closely how the finance team evolves.
- Sentiment and speculative flows
- Elevated options activity, rising short interest and volatile daily moves suggest WRBY is becoming a trader’s stock, at least near term. [43]
- That can amplify both rallies and pullbacks, independent of fundamentals.
Bottom Line: What December 2025’s Rally Really Means for WRBY
As of December 9, 2025, Warby Parker sits at a fascinating crossroads:
- The core business is growing in the low‑teens, shifting from break‑even to sustainably profitable with improving cash generation. [44]
- Management has laid out a clear 2025 guidance roadmap and positioned the company for a “third act” centered on AI innovation. [45]
- The Google partnership provides capital, credibility and a technology stack that could turn smart glasses from a futuristic gimmick into a mainstream product category. [46]
- At the same time, valuation is rich, profitability is still fragile, and the stock is being buffeted by options‑driven speculation and ultra‑bullish long‑term calls like Hedgeye’s “10‑bagger” thesis. [47]
For long‑term investors, WRBY now looks less like a simple value play on affordable glasses and more like a hybrid bet:
- Part on a maturing, profitable specialty retailer, and
- Part on a high‑risk, high‑reward AI hardware platform that won’t truly be tested until at least 2026.
Whether that mix is attractive depends entirely on your risk tolerance, time horizon and view on AI wearables.
What’s clear after this week’s move is that Warby Parker is no longer trading purely on optical retail fundamentals. The market is starting to price in a future where the glasses you buy to see the world might also become one of your most important AI devices—and WRBY is suddenly right in the middle of that story.
References
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