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Warby Parker (Warby Parker) Altman Z-Score : 2.85 (As of Apr. 27, 2024)


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What is Warby Parker Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 2.79 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Warby Parker has a Altman Z-Score of 2.85, indicating it is in Grey Zones. This implies that Warby Parker is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Warby Parker's Altman Z-Score or its related term are showing as below:

WRBY' s Altman Z-Score Range Over the Past 10 Years
Min: 2.59   Med: 3.13   Max: 19.68
Current: 2.79

During the past 5 years, Warby Parker's highest Altman Z-Score was 19.68. The lowest was 2.59. And the median was 3.13.


Warby Parker Altman Z-Score Historical Data

The historical data trend for Warby Parker's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Warby Parker Altman Z-Score Chart

Warby Parker Annual Data
Trend Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
- - 19.68 2.59 3.13

Warby Parker Quarterly Data
Dec19 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.59 2.23 2.67 2.98 3.13

Competitive Comparison of Warby Parker's Altman Z-Score

For the Medical Instruments & Supplies subindustry, Warby Parker's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Warby Parker's Altman Z-Score Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, Warby Parker's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Warby Parker's Altman Z-Score falls into.



Warby Parker Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Warby Parker's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.2956+1.4*-1.1491+3.3*-0.1082+0.6*5.515+1.0*1.1541
=2.85

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Dec. 2023:
Total Assets was $580.3 Mil.
Total Current Assets was $298.6 Mil.
Total Current Liabilities was $127.1 Mil.
Retained Earnings was $-666.8 Mil.
Pre-Tax Income was -19.152 + -17.112 + -15.949 + -10.551 = $-62.8 Mil.
Interest Expense was 0 + 0 + 0 + 0 = $0.0 Mil.
Revenue was 161.855 + 169.849 + 166.093 + 171.968 = $669.8 Mil.
Market Cap (Today) was $1,536.1 Mil.
Total Liabilities was $278.5 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(298.619 - 127.09)/580.312
=0.2956

X2=Retained Earnings/Total Assets
=-666.831/580.312
=-1.1491

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(-62.764 - 0)/580.312
=-0.1082

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=1536.078/278.525
=5.515

X5=Revenue/Total Assets
=669.765/580.312
=1.1541

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Warby Parker has a Altman Z-Score of 2.85 indicating it is in Grey Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Warby Parker  (NYSE:WRBY) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Warby Parker Altman Z-Score Related Terms

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Warby Parker (Warby Parker) Business Description

Traded in Other Exchanges
N/A
Address
233 Spring Street, 6th Floor East, New York, NY, USA, 10013
Warby Parker Inc is engaged in designing and developing designer prescription glasses and contacts to eye exams and vision tests. Brand that operates at the intersection of design, technology, healthcare, and social enterprise. The company primarily derives revenue from the sales of eyewear products, optical services, and accessories. The firm sells products and services through its stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges.
Executives
Steven Clive Miller officer: Chief Financial Officer C/O WARBY PARKER INC., 233 SPRING STREET, 6TH FLOOR, NEW YORK NY 10013
David Abraham Gilboa director, officer: Co-Chief Executive Officer C/O WARBY PARKER INC., 233 SPRING STREET, 6TH FLOOR, NEW YORK NY 10013
Neil Harris Blumenthal director, officer: Co-Chief Executive Officer C/O WARBY PARKER INC., 233 SPRING STREET, 6TH FLOOR, NEW YORK NY 10013
Durable Capital Partners Lp 10 percent owner 4747 BETHESDA AVENUE, SUITE #1002, BETHESDA MD 20814
Teresa Briggs director 2225 LAWSON LANE, SANTA CLARA CA 95054
Ronald A Williams director
Jeffrey Jacob Raider director C/O WARBY PARKER INC., 233 SPRING STREET, 6TH FLOOR, NEW YORK NY 10013
Andrew Hunt director C/O ELEPHANT PARTNERS, 11 NEWBURY STREET, 5TH FLOOR, BOSTON MA 02116
D1 Capital Partners L.p. 10 percent owner 9 WEST 57TH STREET, 36TH FLOOR, NEW YORK NY 10019
Joel E Cutler director, 10 percent owner C/O GENERAL CATALYST PARTNERS, 20 UNIVERSITY ROAD, SUITE 450, CAMBRIDGE MA 02138
Youngme E Moon director 75 NETWORK DRIVE, BURLINGTON MA 01803
Daniel S. Sundheim 10 percent owner C/O D1 CAPITAL PARTNERS L.P., 9 WEST 57TH STREET, 36TH FLOOR, NEW YORK NY 10019
General Catalyst Group V Lp 10 percent owner c/o General Catalyst Group Management LL, 20 University Road Ste 450, Cambridge MA 02138
Gabrielle Sulzberger director 450 LEXINGTON AVENUE, FLOOR 13, NEW YORK NY 10017
General Catalyst Group Management Holdings, L.p. 10 percent owner 20 UNIVERSITY ROAD, 4TH FLOOR, CAMBRIDGE MA 02138