We recently published an article titled Billionaire Nicholas J. Pritzker’s 8 Stocks with Huge Upside Potential. In this article, we are going to take a look at where Warby Parker Inc. (NYSE:WRBY) stands against Nicholas J. Pritzker’s other stock picks with huge upside potential.
Nicholas J. Pritzker is the chairman and co-founder of Tao Capital Partners, a San Francisco-based venture capital firm established in 2013. A prominent American entrepreneur and member of the influential Pritzker family, Nicholas Pritzker is widely recognized for his business acumen and leadership within both the family’s ventures and his own independent endeavors. He previously served as Chairman and CEO of the Hyatt Development Corporation and is associated with the Pritzker family’s substantial business interests, including ownership stakes in Hyatt Hotels and Conwood, a leading chewing tobacco company. His academic journey includes studies at Reed College, Lake Forest College, and the London School of Economics, followed by earning a J.D. from the University of Chicago.
At Tao Capital Partners, Pritzker oversees a firm that strategically focuses on investments in technology, transportation, healthcare, education, sustainable food, alternative energy, agriculture, consumer products, real estate, and hospitality. Although he holds the role of chairman, Nicholas Pritzker is not the portfolio manager of the firm. Instead, that position is held by Matthias Brachtel, who is responsible for managing the firm’s investment portfolio and making critical financial decisions. Under their leadership, Tao Capital has established a reputation for backing innovative and sustainable ventures, emphasizing long-term positive impacts alongside financial returns.
Tao Capital Partners follows a disciplined investment philosophy, targeting sectors poised for growth and transformation. The firm’s investments include companies within the technology and transportation industries, as well as those focused on healthcare, education, sustainable food, and clean energy solutions. This diversified approach reflects the firm’s commitment to not only achieving financial gains but also fostering advancements in critical global sectors.
As of Q4 2024, Tao Capital Partners reported managing $143.28 million in 13F securities across ten core holdings. The firm’s commitment to sustainable and impactful investment aligns with Nicholas Pritzker’s broader vision of leveraging capital to drive positive change. Pritzker’s guidance continues to shape the firm’s strategic direction, while Matthias Brachtel’s portfolio management expertise ensures the optimization of returns within the chosen sectors. Through a combination of innovative vision and practical financial management, Tao Capital Partners continues to build a diverse portfolio aimed at fostering sustainable growth.
Our Methodology
For this article, we searched through Tao Capital’s Q4 2024 13F filings to identify billionaire Nicholas J. Pritzker’s stock picks with the highest upside potential. We compiled the equities with upside potential higher than 2% at the time of writing this article and analyzed why they stood out as sound potential investments. Finally, we ranked the stocks based on the ascending order of their upside potential. To assist readers with more context, we mentioned the hedge fund sentiment around each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A woman wearing a stylish pair of eyeglasses walking through a shopping center.
Warby Parker Inc. (NYSE:WRBY)
Number of Hedge Fund Holders as of Q4: 34
Tao Capital’s Equity Stake: $3.26 Million
Upside Potential as of May 8: 47.17%
Warby Parker Inc. (NYSE:WRBY) is a leading American eyewear brand and retailer, headquartered in New York City. Initially launched as an online-only retailer in 2010, Warby Parker has since expanded significantly, now deriving approximately two-thirds of its revenue from its 276 physical retail stores across the U.S. and Canada. The company offers a range of eyewear products, including prescription glasses, contact lenses, sunglasses, and eye exams.
In 2024, Warby Parker Inc. (NYSE:WRBY) demonstrated strong financial performance, with full-year net revenue rising by $101.6 million (15.2%) to $771.3 million compared to the previous year. Fourth-quarter net revenue saw a robust increase of $28.8 million (17.8%) to reach $190.6 million. This growth was driven by an increase in active customers, which rose by 7.8% to 2.51 million on a trailing 12-month basis. Additionally, the average revenue per customer grew by 6.8% to $307, reflecting effective customer engagement and upselling strategies.
The company’s profitability also improved, with a gross margin of 54.1%, up from 53.8% in the prior year. Operating activities generated $98.7 million in net cash, a significant improvement from $61.0 million in 2023. Full-year free cash flow totaled $34.7 million, highlighting Warby Parker’s enhanced cash generation capabilities. Warby Parker Inc. (NYSE:WRBY) opened 41 new stores in 2024, ending the year with 276 locations, and plans to open 45 additional stores in 2025, including five shop-in-shops at select Target locations.
Warby Parker Inc. (NYSE:WRBY) has set an ambitious outlook for 2025, projecting net revenue between $878 million and $893 million, representing 14% to 16% growth. With a price target of $23.93 and an upside potential of 48.08%, Warby Parker Inc. (NYSE:WRBY) is among billionaire Nicholas J. Pritzker’s stock picks with huge upside potential. The company’s ongoing store expansion and increasing customer engagement underscore its potential for sustained growth.
Polen US SMID Company Growth Strategy stated the following regarding Warby Parker Inc. (NYSE:WRBY) in its Q4 2024 investor letter:
“Warby Parker Inc. (NYSE:WRBY), a U.S.-based omnichannel retailer of eyewear products with a unique vertically integrated direct-to-consumer business model, reported encouraging quarterly results. The company experienced strong growth in its glasses business and continued momentum in contact lenses and optometry. Investment in optometrists is yielding results, driving improved gross margins through enhanced utilization. Warby Parker appears to be emerging from a challenging period where it was adversely impacted by post-pandemic changes in consumer behavior. Company management’s steps to reduce costs appear to be paying off. More recently, we’ve seen fundamentals improve, with marketing spend recovering now that margins have settled. We believe the company has the potential to enhance its profitability as demand continues to recover and it completes and capitalizes on heavy investments in areas such as optometry services, which previously weighed on margins.”
Overall WRBY ranks 4th among billionaire Nicholas J. Pritzker’s stock picks with huge upside potential. While we acknowledge the potential of WRBY as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WRBY but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
