The Warby Parker IPO is hitting the New York Stock Exchange on September 29. Should you invest in WRBY stock? Here are the latest updates…

Warby Parker IPO: About the Business

Warby Parker is a direct-to-consumer eyewear retailer. It offers high-quality, affordable eyeglasses, sunglasses and contact lenses to its customers. Four students at The Wharton School of University of Pennsylvania founded the company in 2010.

It began with a simple problem: glasses are too expensive. One of the founders spent the first semester of grad school blurry-eyed after losing his glasses on a backpacking trip. He couldn’t afford to replace them and found that others shared similar experiences. How hard was it to find good glasses that didn’t empty their pockets?

The founders set out to create an alternative. From there, Warby Parker was born. On its website, the company states…

By circumventing traditional channels, designing glasses in-house, and engaging with customers directly, we’re able to provide higher-quality, better-looking prescription eyewear at a fraction of the going price. We believe that buying glasses should be easy and fun. It should leave you happy and good-looking, with money in your pocket.

Today, Warby Parker offers a full suite of eye care products and services. These include contacts and designer-quality glasses starting at $95. The company offers complimentary at-home try-on. The service lets customers pick five eyeglass/sunglass frames to examine at home, free of charge.

Customers can also seek eye exam services at in-store locations. As of August 18, there are 154 Warby Parker locations. The company retails its products mainly in the U.S. and also serves Canada.

Buy a Pair, Give a Pair Program

Warby Parker’s mission goes beyond its paying customers. The company works with nonprofit partners to give glasses to people in need in over 50 countries. In the prospectus filing, Warby Parker stated…

We also believe that everyone has the right to see. 2.5 billion people around the world need glasses but don’t have access to them; of these, 624 million cannot effectively learn or work due to the severity of their visual impairment. To help address this problem, we work with a handful of partners worldwide to ensure that for every pair of glasses sold, a pair is distributed to someone in need. To date, over eight million pairs of glasses have been distributed through our Buy a Pair, Give a Pair program.

The Market

In a 2018 interview, a co-founder told Inc that the company was “still just scratching the surface, with less than 1 percent of the U.S. market share. There’s still huge potential in our core market, and we think there’s also potential globally.”

E-commerce for eyewear is still in its infancy. In the Warby Parker IPO filing, the company noted that eyewear e-commerce represented 5% of sales in 2019 and grew to 8% in 2020. But the online eyewear market is falling behind. Most people who use prescription glasses or contacts purchase them from their prescriber.

Warby Parker only accounted for 2% of the U.S. adults who used some form of vision correction in 2020. The company’s market share by net revenue is only 1%.

This presents some meaningful opportunities for Warby Parker to scale out in the future. Let’s look at the company’s finances for the Warby Parker IPO…

Warby Parker IPO: The Finances

Detailed financial information is in the Warby Parker IPO prospectus. It can allow you to gain more insight into the company’s finances. If you’re in the market for WRBY stock, let’s look at the details.

Warby Parker highlights some key information for investors. I’ve pulled some highlights from the company’s income statement and balance sheet below…

Net Revenue: The company recorded an increase in revenue. Warby Parker recorded $370 million in revenue for 2019. In 2020, Warby Parker reported an increase to $394 million – representing year-over-year growth of 6.5%.

Gross Profit: The company’s gross profit has grown slightly. Warby Parker recorded a gross profit of $223 million for the 2019 fiscal year. In 2020, the company recorded $232 million in gross profit.

Cash: Warby Parker recorded $55.4 million in cash as of December 2019. The company’s cash grew to over $314 million in December 2020. But as of June 31, 2021, the company’s cash has gone down to $260.7 million in cash. In the S-1 filing, the company states…

We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion of our business and sales and marketing activities. We believe our existing cash and cash equivalents, funds available under our existing credit facility, and cash flows from operating activities will be sufficient to fund our operations for at least the next 12 months.

Total Assets and Liabilities: As of June 30, 2021, the company reported $411.6 million in total assets. And just over $126 million in total liabilities.

Last year, the company raised $245 million from private investors. The Series G funding gave Warby Parker a valuation of $3 billion at the time.

To get a better insight into the company’s finances, you can check out the Warby Parker IPO prospectus. And for those interested in the filing, let’s look at the details.

WRBY Stock Coming September 29

Warby Parker announced plans on August 24 to go public through a direct listing instead of a traditional IPO. It plans to list on the New York Stock Exchange (NYSE) under the symbol WRBY. The WRBY stock will begin trading on September 29.

In the offering, registered shareholders will offer 77.7 million shares of common stock. Shares are expected to price at $24.53 per share. At this price point, the offering could raise around $2 billion in the public offering.

Due to the nature of the direct listing, the offering won’t raise new money for the company or issue new shares. But investors will be able to sell their existing shares on the open market. Shareholders will receive proceeds if they choose to sell their shares.

There are no underwriters involved. Instead, Goldman Sachs, Morgan Stanley and Allen & Company will be serving as financial advisors. There’s no official date for the Warby Parker IPO, but you can check back here to find the latest updates.

As always, make sure to research before you invest. IPOs can be volatile for the first few months. And share prices can change quickly. But if IPO investing interests you, check out our top recent IPOs and our IPO calendar. We update it daily to give you the latest news on upcoming and filed IPOs.

If you’re looking for the latest investment opportunities, consider signing up for Liberty Through Wealth. This free e-letter is full of market insights from leading experts. You’ll hear directly from bestselling author and investment expert Alexander Green. He’s also worked as an investment advisor, research analyst and portfolio manager on Wall Street for 16 years.