Warby Parker Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✗ 28▾

  All 13 investors flag WRBY's valuation

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio9.3x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 2744.0x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-0.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.2%, ROC=-5.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS2744.0x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)31.0x

  ✗Dreman< 8x

  Price / Book Value per Share9.3x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=2744.0x, OE Yield=-0.4%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=2744.0x, FCF Yield=1.3%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=2744.0x, P/B=9.3x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share78.5x

  ✗Ackman<= 25

  Price vs. Trailing Low166% of trailing low ($16.51)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+0.22%; #3133/6340 (top 49.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.1182; #4648/6449 (top 72.1%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS2744.0x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share9.33x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.2740; #3448/5247 (top 65.7%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+0.62%; #2446/4519 (top 54.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+31.80%; #979/6202 (top 15.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 5▾

  WRBY overvalued: all 5 models price fair value below $27.44 (median $0.81)

  Graham fair value$0.81

  ✗Graham-3287.7% margin vs $27.44

  Buffett fair value$0.16

  ✗Buffett-17050.0% margin vs $27.44

  Munger fair value$5.79

  ✗Munger-373.9% margin vs $27.44

  Pabrai fair value$0.32

  ✗Pabrai-8475.0% margin vs $27.44

  Ackman fair value$10.83

  ✗Ackman-153.4% margin vs $27.44
• Profitability6% pass✓ 8✗ 27▾

  15 of 16 flag WRBY's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)1/8 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)1/8 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-23.1%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-0.6% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$1.6M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 2744.0x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE1.9%

  ✗Lynch> 15%

  EBIT / Enterprise Value-0.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-0.2%, ROC=-5.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets0.23%

  ✓PiotroskiROA > 0

  ROA Change YoY-3.01% -> 0.23% (delta: +3.24%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=15.37%, ROA=0.23%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY55.3% -> 54.0%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue1.1%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity1.9%

  ✗Dreman> 12%

  Margin of SafetyP/E=2744.0x, P/B=9.3x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-8.8% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency1/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue0.2%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity1.9%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-10.7% (2023) -> -0.6% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 54.5% -> 54.0%, operating margin -10.7% -> -0.6%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+0.22%; #3133/6340 (top 49.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+64.60%; #406/3702 (top 11.0%)

  ✓AsnessTop 30% of eligible cross-section

  Net income / positive book equity+1.85%; #2772/5226 (top 53.0%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.1191; #3691/5884 (top 62.7%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years1/7 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Verdicts7% pass✓ 1✗ 13▾

  Split decision: 12 FAIL · 3 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (2/9)✗LynchFAIL (1/7)✗GreenblattRank #1881•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (2/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (1/5)✗AckmanFAIL (3/9)✗TempletonFAIL (2/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (1/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage8% pass✓ 3✗ 12▾

  11 of 12 flag WRBY's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest Coverage

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities2.26

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-16.4x, D/EBITDA=N/A

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Growth13% pass✓ 4✗ 9▾

  7 of 8 flag WRBY's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 2744.0x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 1.5% vs Rev: 9.9%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency1/7 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth13.0%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 54.5% -> 54.0%, operating margin -10.7% -> -0.6%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR17.2%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag WRBY's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio2.26

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)

  ✗Buffett> 10%

  ROIC - WACC

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-5.2%

  ✗Greenblatt> 25%

  Current Ratio Change YoY2.50 -> 2.35

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY1.14x -> 1.21x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities2.26

  ✓Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)

  ✗SleepROIC > 12% in a majority of years
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Dreman, Pabrai +2 more object

  Free Cash Flow Proxy$1.6M

  ✓BuffettPositive and growing

  FCF Positive and Growing$21.3M

  ✗LynchPositive and growing

  Operating Cash Flow$110.8M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=15.37%, ROA=0.23%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)31.0x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=2744.0x, FCF Yield=1.3%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive4/7 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap0.6%

  ✗Ackman>= 4%

  Price / FCF per Share78.5x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency6/7 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$21.3M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+0.62%; #2446/4519 (top 54.1%)

  ✗OshaughnessyTop 10% of eligible cross-section