Stifel Raises Target Stifel analyst Martin Landry expects the release of Kits Eyecare Ltd.’s fourth-quarter 2025 results on March 4 “should not bring many surprises,” continuing to see a “long runway growth runway” as the expanding North American eyewear market increasingly shifts online.
“The company has pre-released key metrics for Q4/25 including revenues and EBITDA margin,” he explained. “We have aligned our Q4/25 revenue and EBITDA to reflect the company’s preliminary results. Last week KITS introduced a guidance for Q1/26 calling for strong revenue growth of 25-29 per cent, stronger than expected, but for EBITDA margins of 4-6 per cent, lower than our forecasts of 7.6 per cent.
“The company decided to accelerate revenue growth at the expense of near-term profitability. We have adjusted our Q1/26 numbers and the remainder of our 2026 estimates to reflect this new dynamic. KITS is disrupting the traditional brick and mortar eyewear market with its rapid turnaround time and very low prices.”
Mr. Landry emphasized the decline in profitability comes from “increased marketing spending to accelerate the company’s progression into the glasses category,” noting the Vancouver-based company has a promotional campaign for glasses with a buy-one get one free offer.
“We believe this offer has improved website sales conversion. We have tweaked our forecasts to reflect the company’s preliminary results,” he added.
“On February 17, 2026, KITS issued financial guidance for Q1/26. The company expect revenues of $58-60 million, up 25-29 per cent year-over-year, higher than our previous expectations of $55-million and consensus at the time of $56-million. KITS has adopted a strategy of pushing for higher revenue growth and building its moat by increasing its customer base more rapidly than before. However, this delays the profitability expansion, and we had to scale back our 2026 EBITDA estimates by 15 per cent. We would like to see continuous profitability expansion on a year-over-year basis, especially given that the company has a portion of its costs which are fixed.”
Maintaining his “buy” recommendation for its shares, Mr. Landry raised his target to $24 from $22 after rolling forward his valuation to include his 2027 forecast. The average target on the Street is $24.13.