National Vision Holdings, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
National Vision Holdings, Inc. (NASDAQ:EYE) shares fell 2.1% to US$35.18 in the week since its latest annual results. Revenues were US$1.7b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.40 were also better than expected, beating analyst predictions by 17%. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
View our latest analysis for National Vision Holdings
Taking into account the latest results, the latest consensus from National Vision Holdings's ten analysts is for revenues of US$1.90b in 2020, which would reflect a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to soar 61% to US$0.67. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.87b and earnings per share (EPS) of US$0.61 in 2020. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
The consensus price target rose 7.3% to US$41.85, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on National Vision Holdings, with the most bullish analyst valuing it at US$46.00 and the most bearish at US$37.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 10%, in line with its 12% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 5.7% next year. So it's pretty clear that National Vision Holdings is forecast to grow substantially faster than its market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around National Vision Holdings's earnings potential next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple National Vision Holdings analysts - going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether National Vision Holdings's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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