There is clear catalyst for why this analyst is so bullish.
Investors are always on the lookout for that stock with massive breakout potential that can be a long-term winner.
Those types of stocks are never easy to find, but one analyst sees that type of potential in Warby Parker (NYSE:WRBY), the manufacturer and seller of eyewear and glasses.
In fact, the analyst, Brian McGough at Hedgeye, said Warby Parker stock has the potential to be a 10-bagger in the next five years.
A 10-bagger is a stock that grows 10 times its price. McGough sees that happening in the next five years, which would lift the stock from its current price of around $20 per share to $200 per share.
McGough called Warby Parker the “retail stock to own in 2026,” in commentary posted on Monday, December 8.
It was one reason why Warby Parker stock surged some 14% on Monday to around $21.40 per share.
But the major reason for Warby Parker’s surge, and the catalyst behind McGough’s 10-bagger call, is a deal the company struck with Google.
Warby Parker to launch Google AI eyewear
In an SEC regulatory filing on December 8, Warby Parker officials announced that its “first lightweight, AI glasses” developed in partnership with Google are expected to launch in 2026.
The glasses will be powered by Google Gemini and will feature Google search, maps, translation, among other functions. They will be built on the Android XR platform, which is its extended reality, or virtual reality platform. Thus, the glasses will be compatible with Android devices and smartphones and are described as “all-day wear.”
Warby Parker’s partnership with Google was first announced back in May. But this latest update sets a date for when the first AI glasses will be released.
“Looking ahead, we believe multimodal AI is perfectly suited for glasses, enabling real-time context and intelligence to augment a wearer’s surroundings as they move through the world. We couldn’t be more excited to be partnering with Google to bring together the best of AI and the best of eyewear,” Warby Parker co-founder and co-CEO Dave Gilboa said back in May.
“Stellar” balance sheet
As part of the partnership, Google invested $75 million in Warby Parker for product development and took a $75 million stake, or roughly 3%, in the company.
Brian and his team still can’t find another story anywhere in retail globally with such a massively improving return profile,” the Hedgeye note said. “The AI Glasses partnership with Google blows out the TAM (total addressable market).”
McGough called Warby Parker’s balance sheet “stellar,” with excess cash used to build an international brand and footprint. McGough is hosting a deep dive presentation on Warby Parker on Tuesday, so more details may follow.
In the last quarter, ended September 30, Warby Parker saw revenue increase 15%, customers grow 9%, and net income of $5.9 million, up from a net loss of $4.1 million in the same period a year ago.
Warby Parker stock is considered a consensus buy by the 14 analysts that cover it, with a price target of $22 per share, suggesting 5% growth. Investors should note that this 10-bagger call is from just one analyst, so, as always, do your own research on the stock as well.
