4 Reasons To Be Bullish On National Vision Holdings, According To William Blair

National Vision Holdings Inc EYE is the third-largest optical retailer and investors should be bullish on the stock, according to William Blair.

The Analyst

William Blair's Ryan Domyancic initiated coverage of National Vision Holdings with an Outperform rating.

The Thesis

The bullish case for National Vision's stock is four-fold, Domyancic wrote in a note.

• The company boasts a key advantage over its competitors in the price of its products and services. Specifically, consumers can buy two pairs of glasses and an eye exam for nearly $70 while a similar package at Costco COST costs $270 and $260 at LensCrafters. The price advantage over its peers is due to its model of employing its own eye doctors and making use of its own laboratory network and a focus on private-label products.
• National Vision CEO Reade Fahs has shown an attractive track record since leading the company in 2003. He has been running the company with a positive same-store sales growth, including throughout the economic downturn of 2008 and 2009.
• The company's momentum over the years appears to be sustainable given expectations for a 9 percent annual sales growth over the next five years.
• Unlike other retail sectors, the company's business appears to be insulated from the growth of online shopping. Online sales accounted for just 4 percent of all eyeglass unit sales in 2017 due to the importance of in-person eye exams and consumers wanting to try on eyeglasses before making a purchase.

Price Action

Shares of National Vision Holdings were trading down 2.3 Thursday to $43.81.

Related Links:

An Analyst Gives 8 Reasons To Buy National Vision

3 Reasons Why Cooper Companies Landed A KeyBanc Upgrade