Inside National Vision’s Risk Factors

Georgia-based National Vision Holdings (EYE) sells a variety of eye care products and ranks as the second-largest optical retailer in the U.S. in terms of sales. It operates more than 1,200 retail stores under various brands, including locations at select Walmart (WMT) stores and military bases. 

For its Fiscal Q3 2021 ended October 2, National Vision reported a 6.7% year-over-year rise in revenue to $518 million, exceeding the consensus estimate of $511.6 million. It posted adjusted EPS of $0.38, which beat the consensus estimate of $0.25.

For its upcoming earnings report for Fiscal 2021, National Vision anticipates revenue in the range of $2.04 million to $2.06 million. It expects adjusted EPS in the band of $1.28 to $1.33.

The company ended Q3 with $439.1 million in cash and $620 million in debt. It plans to repurchase $100 million of its shares through December 2023.

With this in mind, we used TipRanks to take a look at the risk factors for National Vision.

Risk Factors 

According to the new TipRanks Risk Factors tool, National Vision’s main risk category is Finance and Corporate, representing 43% of the total 42 risks identified for the stock. Production and Legal and Regulatory are the next two major risk categories at 19% and 14% of the total risks, respectively. The company has recently updated its profile with one new Legal and Regulatory risk factor.

National Vision informs investors that some of the steps the White House has taken to try to end the COVID-19 pandemic could cause it to experience labor difficulties. It mentions the vaccine mandates for businesses and federal contractors. It cautions that such mandates may trigger workforce attrition, which could, in turn, adversely affect its business and financial condition.

The Finance and Corporate risk factor’s sector average is 40%, compared to National Vision’s 43%. National Vision’s shares have declined about 17% over the past 12 months.

Analysts’ Take

Jefferies analyst Stephanie Wissink recently reiterated a Buy rating on National Vision stock with a price target of $70, which suggests 81.49% upside potential. Although the tight labor market could drive up costs, the analyst notes that traffic momentum reveals improved throughput.

Consensus among analysts is a Moderate Buy based on 4 Buys, 1 Hold, and 1 Sell. The average National Vision price target of $61.67 implies 59.68% upside potential to current levels.

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