The Market Can See It Now!

Warby Parker $WRBY started with a simple idea.

Sell stylish prescription glasses at a fair price, cut out the middleman, and make the eyewear shopping experience less painful for normal people.

That was the original story when the company launched in 2010, but the business has grown far beyond its online roots.

Today, Warby Parker sells prescription glasses, sunglasses, contacts, eye exams, and vision tests through a growing mix of e-commerce and retail stores.

The company now has 337 stores, serves 2.7 million active customers, and still represents only 1.3% of the roughly $70 billion U.S. eyewear market.

That means the story is still small enough to matter.

And now, Warby Parker is preparing to launch intelligent AI glasses later this year in partnership with Google and Samsung, which the management team believes could help redefine the role glasses play in everyday life.

That's the sexy part of the story.

But the chart is what has our attention today.

Warby Parker has carved out one of the best base-on-base patterns in the market.

After collapsing from its post-IPO highs, the stock spent years building a massive bearish-to-bullish reversal pattern.

Then it broke higher, paused again, and started building another base just below $31.

That's our line in the sand.

If buyers can finally push WRBY above $31 and hold it there, this would complete the latest accumulation pattern and mark the beginning of a brand-new primary uptrend.

And the earnings scorecard tells us why this setup deserves attention.

Warby Parker has recently turned the corner on profitability, and the market is starting to reward that shift.

Revenue continues to grow at a steady high-single-digit to low-double-digit pace, with the latest quarter coming in at 8.3% YoY growth.

The company also generated net income of $3.2 million, adjusted EBITDA of $29.6 million, and free cash flow of $8.4 million during the quarter.

In other words, Warby Parker is becoming a real business.

The one blemish is that earnings growth has decelerated over the past two quarters, which we need to monitor closely.

But here is the key point…

The market didn't care.

In fact, Warby Parker just posted two of its best earnings reactions ever, rallying 17.8% after its February report and 23.5% after its May report.

That's the kind of earnings sentiment we love to see.

When a stock rallies aggressively after earnings despite imperfect numbers, the market is telling us that expectations were too low and that investors are willing to look ahead.

So when we put the whole story together, Warby Parker checks a lot of boxes.

The technicals are improving as the stock presses against a major breakout level.

The fundamentals are moving in the right direction.

And the earnings sentiment has flipped decisively bullish, with buyers rewarding the stock after back-to-back reports.

That's fusion analysis in action.

At the Beat Report, we're looking for stocks where the technicals, fundamentals, and earnings sentiment all point in the same direction.

Warby Parker is not quite there yet because $31 still needs to be cleared.

But if buyers clear that level with conviction, this could quickly become one of the more exciting growth stories in the market.

And that brings us to our next Beat Report Pitch Meeting.

Earlier this month, we held our first-ever public Beat Report Pitch Meeting. 

These are the meetings we usually hold internally, where our Beat Team brings their highest-conviction trade ideas to Steve Strazza and debates them in real time.

For the first time, we pulled back the curtain and let members watch the process LIVE earlier this month.

And because of the overwhelming amount of positive feedback we've received, we're doing it again on Monday.

If you want access to the next pitch meeting, our current watchlist, and the next trade alert we send to members, join Beat Report today.

We hope to see you there!

Happy fishing,

-The Beat Team