Small-cap Summary Small-cap summary:
Kits Eyecare Ltd. (KITS-T) reported mixed preliminary first-quarter results on Wednesday.
Before markets opened on Wednesday, the Vancouver-based company said revenue rose 23 per cent year over year to approximately $57.4-million.
Canaccord Genuity analyst Luke Hannan said the revenue was below his and consensus estimates of $59.1-million, and management’s guidance of $58-million to $60-million going into the quarter.
“That said, glasses revenue in Q1/26 increased ~61% YoY to $10.8 million, well above the >50% growth rate management had called for,” he wrote.
Adjusted EBITDA increased quarter-over-quarter to exceed 6 per cent of revenue. Mr. Hannan said the estimate implies an excess of $3.4-million, exceeding his $2.9-million and consensus of $3-million or about 5.1 per cent margin, and management guidance of 4 per cent to 6 per cent EBITDA margin.
“Following the release, we have adjusted our model to reflect the preliminary Q1/26 results while leaving the rest of our model mostly unchanged,” he wrote, while reiterating his “buy” rating and maintaining his $23 target price.
“While there are no perfect public comparable companies to KITS, we believe the broader eyewear retail peer set is an appropriate barometer, with the group trading at an average of 3.2x FY+2 sales,” he wrote. “In our view, KITS should trade at a premium to the group given its earlier stage in the growth cycle, higher expected revenue growth, healthy balance sheet, and strong management team.”
After markets closed on Wednesday, the company announced the promotion of Tai Silvey to president, effective immediately. He joined the company in January, 2022 as senior vice-president, operations, and later served as chief business development officer.