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National Vision Q3 Earnings: Buying Soaring NasdaqGS:EYE Stock Before Call?

in EARNINGS/INVESTING IDEAS by

National Vision Holdings, Inc. (NasdaqGS:EYE) is scheduled to report Q3 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of $0.26/share on revenue of $479.7 million. The consensus earnings per share (EPS) of $0.26/share is based on a poll of 12 analysts and represents a growth in eps of 42.5% over the same quarter last year, when the company reported earnings of $0.18/share.

The revenue forecast of $479.7 million based on a poll of 10 analysts implies a year-over-year (YoY) growth in revenue of 11.1%. Last year the company reported $431.9 million in revenue for the quarter.

Expected to report EPS growth of 42.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $479.66 $431.90 11.1%
EPS $0.26 $0.18 42.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarter.

What are your expectations from National Vision Holdings, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.51 -$0.41 19.3% Beat
Q1, 2020 $0.02 $0.28 1,206.6% Beat
Q4, 2019 $0.01 $0.11 1,337.9% Beat
Q3, 2019 $0.12 $0.18 50.2% Beat
Q2, 2019 $0.21 $0.20 −4.1% Missed
Q1, 2019 $0.31 $0.33 7.9% Beat
Q4, 2018 $0.01 $0.01 −30.0% Missed
Q3, 2018 $0.12 $0.12 0% Met

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by falling −1.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $33.92 $33.30 −1.8% Decline
May 7, 2020 $24 $26.41 10.0% Increase
February 26, 2020 $33.83 $35.18 4.0% Increase
November 7, 2019 $24.83 $27.75 11.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.02, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.02 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

National Vision Holdings, Inc. is currently trading at $41.75/share, down −1.0% for the day. The company is trading at approximately 97.0% of its 52-week high of $43.50/share. The company’s stock price is up 25.4% since the last earnings report and down 0.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 60.63 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:EYE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −116.39 and a forward P/E multiple of 161.77.

National Vision Holdings, Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.11. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 27, 2020
Stock Price (Current) $41.75
P/E Ratio −116.4x
P/E Ratio (Fwd) 161.8x
PEG Ratio 0.4
Total Debt / Total Capital 23.6%
Levered Free Cash Flow $42.204 million
EV / EBITDA 36.3x

Finbox

National Vision Holdings, Inc. is a mid-cap stock with a market capitalization of $3.391 billion and a total enterprise value of $4.185 billion. The company operates in the Consumer Discretionary sector and the Specialty Retail industry.

National Vision Holdings, Inc., through its subsidiaries, operates as an optical retailer primarily in the United States. The company operates in two segments, Owned & Host and Legacy. It offers eyeglasses and contact lenses, and optical accessory products; provides eye exams through its America’s Best, Eyeglass World, Vista Optical, Fred Meyer, and Vista Optical military, as well as Vision Center branded stores; and offers health maintenance organization, vision care benefit plan, and optometric services. As of December 28, 2019, the company operated through 1,151 retail stores in the United States and its territories, as well as various e-commerce Websites. National Vision Holdings, Inc. was founded in 1990 and is headquartered in Duluth, Georgia.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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