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Shares of eyeglasses retailer Warby Parker (NYSE: WRBY) rallied 50.9% in May, according to data from S&P Global Market Intelligence. The company reported its first-quarter earnings results on May 9, and investors really liked what they heard. Digging into the numbers, there was a lot to like.

A beat and raise with margin expansion

In the first quarter, Warby Parker grew revenue by 16.3% to exactly $200 million, with a net loss per share of $0.02. While the company recorded a small GAAP loss, both revenue and the bottom line handily beat earnings expectations. Furthermore, management upped its full-year guidance.

Perhaps most impressive was the reacceleration in revenue. The 16.3% growth marked a 4-percentage-point acceleration over the prior-year quarter's 12.2% growth and a 6-point acceleration over the first quarter of 2022's 10.3% growth.

Generally, it's harder for a company to grow faster as it gets larger, but Warby Parker's team has done just that two years in a row. On top of the outsized growth, margins also expanded, with gross margins increasing by 1.7 percentage points over the prior year and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins expanding by 0.9 percentage points.

Management attributed the great results to investments it has made in marketing, as well as expanding its store count and investing in giving eye exams to become a one-stop shop for vision care.

Is Warby Parker still a buy?

It's difficult to value Warby Parker, as it's still inking net losses, but those are narrowing to just below breakeven. On the other hand, adjusted EBITDA is forecast to reach $70 million this year on roughly $757 million in revenue, at the midpoint of guidance. The company is also free-cash-flow positive and debt-free.

In that light, the current $2 billion market cap still seems reasonable if Warby can continue growing at a double-digit pace for the foreseeable future.

On its earnings presentation, Warby Parker claimed it's only penetrated a little more than 1% of the $66 billion U.S. eyewear market and sees room for its store count to roughly quadruple from its current 245-store footprint. Assuming Warby continues to execute like it did last quarter and further penetrates the U.S. eyewear market over time, it may still be a buy, even after May's stellar performance.

After last-quarter's blowout numbers, it's certainly one of the top retailers to watch in 2024.

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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.