National Vision EYE has shown strong year-to-date momentum, with its shares rising 28.2%. This has far outpaced the industry’s 3.4% growth and the S&P 500 composite’s 2.2% fall.  

Currently carrying a Zacks Rank #2 (Buy), this leading U.S. optical retailer is benefiting from the performance of its America’s Best brand. National Vision is making strides in improving exam capacity via recruiting and retention initiatives and growing remote exam capabilities. With a focus on maintaining a healthier store fleet, the company has undertaken a series of actions to drive enhanced comparable store sales growth and profitability.

National Vision provides budget-friendly eye exams, eyeglasses and contact lenses to low-income consumers and aims at making eye care and eyewear reasonable for all Americans. As of the fiscal 2024 end, the company operated through a diverse portfolio of 1,240 retail stores across four brands and multiple consumer websites. Comparable store sales growth and new store openings are key drivers of EYE’s net revenues.

What’s Driving National Vision’s Growth?

The rally in the share price can be linked to the ongoing strength of America’s Best Brand, with Managed Care playing a key role. America’s Best represents National Vision’s fastest-growing customer cohort, accounting for approximately 40% of 2024 revenues. Among notable developments, the brand introduced the Wide Buys promotion to enhance value offerings and attract new customers.

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Following a favorable response to the promotional two-pair progressive offer for $129.95, National Vision launched a new-entry progressive bundled offer that provides ongoing everyday value. Also, America’s Best secured an exclusive U.S. retail partnership with Florence by Mills eyewear collection and launched an exclusive collaboration with Pair Eyewear nationwide.

National Vision deploys remote medicine technology, integrating it with the electronic health record platform to drive expanded capacity, improve in-store efficiencies and enhance the patient experience. As of 2024 end, more than 730 locations are equipped with remote technology, with remote exams representing about 12% of exams in remote-enabled states. Furthermore, the success of key leadership additions, particularly across Managed Care, pricing and field operations, has driven operational improvements. National Vision posted a 3.9% year-over-year increase in fourth-quarter sales, along with positive adjusted comparable store sales for the eighth straight quarter.

It is also addressing exam capacity constraints through retention, recruitment, and remote and hybrid initiatives. In 2024, doctor retention came squarely in line with historical ranges between 80% and 90%. Meanwhile, National Vision is refining its store operations to drive comparable store sales and improve profitability. Following a comprehensive store fleet review, the company plans to take action at 43 locations through fiscal year 2026 to improve the underlying foundation of its core business.

Eyeglass World brand also underwent several strategic changes on a path toward stabilization, leveraging successful strategies from America's Best. As part of its ongoing technological investments, National Vision will roll out a new finance ERP in the second quarter, as well as a new Adobe CRM platform in the second half of 2025. With all these advancements, the company has moved into 2025 with a healthier footing relative to exam capacity, along with the necessary tools to improve efficiencies and strengthen customer marketing efforts.

National Vision’s Concerns

The overall economic environment continues to be challenging, and macroeconomic factors such as inflation and geopolitical uncertainties could indirectly impact National Vision’s results of operations. Operating in a highly competitive optical retail industry could also present challenges.

A Glance at Estimates for EYE

The Zacks Consensus Estimate for National Vision’s 2025 and 2026 earnings per share (EPS) is expected to increase 5.8% and 21.1% year over year, respectively, to $55 cents and $66 cents. In the past 30 days, the Zacks Consensus Estimate for the company's 2025 EPS has risen 7.8%.   

Revenues for 2025 are projected to grow 2.2% to $1.92 billion, while the same for 2026 is expected to reach $1.96 billion, implying a 2.1% increase.

Other MedTech Stocks

Some other top-ranked stocks in the broader medical space are Veracyte VCYT, Hims & Hers Health HIMS and Boston Scientific BSX.

Veracyte has an earnings yield of 3.6% against the industry’s -3.3% yield. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 515.9%. Its shares have rallied 40.1% against the industry’s 7.3% decline in the past year.

VCYT carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hims & Hers Health, carrying a Zacks Rank #2 at present, has an earnings yield of 1.9% against the industry’s -7.6%. Shares of the company have surged 115.6% against the industry’s 10.6% decline. HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 40.4%.

Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.3%. Shares of the company have rallied 49.4% compared with the industry’s 7.1% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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