Is KITS Eyecare still a buy?

Haywood Capital Markets analyst Gianluca Tucci reiterated his “Buy” rating and $27.00 price target on KITS Eyecare (KITS Eyecare Stock Quote, Chart, News, Analysts, Financials TSX:KITS) after the company reported fourth-quarter results that were broadly in line with expectations.

KITS posted Q4 revenue of $53.9-million and Adjusted EBITDA of $2.4-million, matching its preannouncement on revenue while exceeding expectations at the midpoint on profitability. Gross margin was 35.0%, slightly above Tucci’s 34.6% estimate.

Tucci said organic growth remains strong at more than 20%, while the glasses category grew 33% year-over-year, reflecting the advantages of the company’s vertically integrated platform.

“We reiterate our Buy recommendation and maintain our DCF-based target price of $27.00,” Tucci said in a March 5 report. “KITS is successfully transitioning from a high-growth challenger brand into a scaled, profitable platform operating within a highly fragmented and structurally attractive industry.”

The analyst said the company’s strategy of reinvesting gross profit into customer acquisition should support long-term growth, noting that KITS’ in-house lab capacity can support approximately $500-million in annual revenue with minimal incremental capital spending.

Management also provided strong guidance for the first quarter of 2026, forecasting revenue of $58.0-million to $60.0-million, representing 25% to 29% organic growth and exceeding the $55.6-million consensus estimate. Adjusted EBITDA margin is expected to range between 4.0% and 6.0% as the company increases marketing spending to capture market share.

Tucci highlighted the growing contribution from prescription glasses, a higher-margin category that is emerging as a key growth driver as online penetration in eyewear remains relatively low.

Tucci expects KITS to generate $14.4-million in Adjusted EBITDA on revenue of $248.6-million in fiscal 2026, improving to $23.0-million in Adjusted EBITDA on revenue of $293.4-million in fiscal 2027.

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