Small-cap Summary Small-cap summary:
Kits Eyecare Ltd. reported first-quarter guidance this week, including organic growth of nearly 30 per cent.
Before markets opened on Tuesday, the Vancouver-based company said its revenue is expected to be in the range of $58-million to $60-million, reflecting 25 to 29 per cent organic growth. Adjusted EBITDA as a percentage of revenue is expected to be between 4 and 6 per cent.
Glasses revenue is expected to exceed $10-million, representing more than 50 per cent year-over-year growth, the company stated.
Canaccord Genuity analyst Luke Hannan reiterated his “buy” rating and $23 target after the report.
He said the revenue guidance came in higher than his estimate of $54.9-million (or 18 per cent year over year) and the consensus of $55.6 million (or 19 per cent year over year).
He said EBITDA margin guidance is below his estimate of 6.2 per cent and the consensus of 6 per cent.
“While at the midpoint it’s [about] 240 bps [basis points] below Q1/25’s 7.4% margin, the guidance is in line with KITS’ Q4/25 preliminary 4-6% expectation... reflecting its near-term strategic focus to acquire repeat, high-value customers,” he wrote in a note.
“Though margin expansion may be tempered in the near-term as the company invests in growth, we believe KITS’ higher marketing spend should yield positive results in the long-term, and we continue to like its value proposition and positioning as a capital-light vertically-integrated operator in the North American market.”