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Bull of the Day: National Vision (EYE)

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National Vision Holdings (EYE - Free Report) is a $4 billion provider of retail optical services with over 1,200 stores in 44 states.

Its brand portfolio for affordable optometrist-delivered eyecare and prescribed eyewear consists of America's Best Contacts & Eyeglasses, Eyeglass World, Vision Centers inside select Walmart stores and Vista Optical locations inside Fred Meyer stores and on select military bases. National Vision Holdings, Inc. is headquartered in Duluth, Georgia.

National Vision employs over 13,000 people, including a network of more than 2,000 optometrists. They have become a mass market leader in their mission to make quality eye care and eyewear more affordable and accessible, claiming "to help bring sight to the more than 2 billion people around the world in need of vision correction."

The reason that EYE is a Zacks #1 Rank Strong Buy right now is because EPS estimates have been steadily on the rise. And also because the company keeps delivering big upside surprises every quarter.

The last four quarterly EPS surprises came in at +246%, +108%, +28%, and +411%.

And while full-year 2021 consensus estimates rose over 10% right after their last report to $0.90 EPS, one investment bank just bumped their targets again.

Last week, Jefferies & Co. pushed their 2021 number to $0.93 and next to year to $1.09, lifting the 2022 consensus to $1.00.

Equally impressive are the sales estimates, with this year's consensus projecting a 15% advance to $1.97 billion. And next year is already envisioning a nearly 9% rise to $2.14 billion.

So while the stock is pricey on a P/E basis, it's only trading at 2 times sales.

Top Healthcare Idea at Hedgeye

In late April, I saw a presentation by an excellent healthcare analyst, Tom Tobin, at equity research firm Hedgeye. Here's a slice of what he had to say...

"One of the reasons we picked this up is because as we were looking at where healthcare had been deferred and delayed. As acuity (your vision) continues to deteriorate over time, people are going to have to come back to dental, vision, colonoscopies, etc.

"The first component of our thesis is the return to in-person care. This has already begun to happen; we've been hearing from providers that they're getting closer to back to trend, or maybe 5%-10% below (which is still a significant gap)."

Those two themes are pretty significant tailwinds for EYE over the next year or two. An aging population needing more vision care and those same people and more catching up on care after deferring it for up to a year during the pandemic shutdowns.

And while Tobin's estimates are not included in the three banks offering projections for the Zacks Rank, I believe his model is above consensus and tracking a longer duration growth trend.

EYE reports earnings on Thursday May 13 before the market open with a company conference call scheduled for 10am EDT.

While shares are struggling with something of a triple top at $52, another EPS surprise might be just the prescription to see it clearly over that horizon.

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