National Vision Gains 129.5% in a Year: What's Driving the Rally?

National Vision EYE has witnessed strong momentum over the past year. Shares of the company have risen 129.5%, outperforming the industry’s 12% decline. The S&P 500 composite has increased 23.1% during the same time frame.

With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) company appears to be a solid wealth creator for its investors at the moment.

National Vision is a major optical retailer in the United States. As of June 28, 2025, the company operated through a diverse portfolio of 1,240 retail stores across four brands, along with associated omnichannel consumer websites. National Vision operates through one reportable segment, Owned & Host, which includes two owned brands — America’s Best Contacts and Eyeglasses (America’s Best) and Eyeglass World. 

Factors Favoring EYE’s Share Price Growth

National Vision’s share price is trending upward, prompted by its strong market share gain in Owned & Host segment. The segment continues to gain from positive comparable store sales growth and new store openings. Of the two Owned brands, America’s Best remains the primary revenue driver.

The company is also driving improvements in Eyeglass World, bringing in a new leadership team earlier in 2025. Further, National Vision leverages remote capabilities to expand exam capacity, with approximately two-thirds of its store base now enabled with remote technology. Its remote hybrid pilot is also progressing well, with more in-store doctors now trained to perform remote exams in other locations. Simultaneously, National Vision is implementing electronic health records to drive expanded capacity, improve in-store efficiencies and improve the patient experience. A solid fourth-quarter performance is also expected to contribute further.

Investors are currently focused on the company’s ongoing strategic transformation. According to management, the transformation initiatives are gaining traction and the strategic focus on key customer segments is driving improvement in its comparable sales. Newly added premium frames like Lam, Ted Baker, Jimmy Choo, HUGO Boss are selling faster than expected. Additionally, the new, refreshed branding unveiled in August 2025 was a major milestone in National Vision's transformation journey.

Meanwhile, National Vision’s 2026 outlook looks encouraging. Net revenues are projected in the range of $2.033-$2.091 billion. Adjusted EPS is estimated to be between 85 cents and $1.09. 

Operationally, in the fourth quarter, gross margin expanded 45 basis points (bps) despite a 13.9% rise in the cost of revenues. Also, the operating margin expanded 186 bps. These factors have positively impacted the stock, contributing to its rise. 

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Factors That May Offset EYE’s Gains

EYE’s business remains vulnerable to growing geopolitical complexities, supply-chain disruptions, shortages of healthcare staff and volatility in capital markets. Additionally, the ongoing changes in U.S. trade policy and retaliatory tariffs look discouraging. All these factors continue to weigh on its profitability. In the fourth quarter of 2025, SG&A expenditures rose 12.1% year over year.

From a solvency viewpoint, National Vision has a significant amount of indebtedness. It exited the fourth quarter of 2025 with cash and cash equivalents of $39 million and short-term debt of $17 million. However, long-term debt was $229 million, much higher than cash levels. This leverage could have several consequences, including greater exposure to adverse economic, industry or competitive developments.

Taking a Look at EYE’s Estimates

The Zacks Consensus Estimate for 2026 EPS has moved north 1 cent in the past 30 days.

The company has an estimated long-term EPS growth rate of 20.1% compared with the industry’s 12.3%. 

Other Stocks to Consider

Some other top-ranked stocks in the broader medical space are Globus Medical GMED, Intuitive Surgical ISRG and Edwards Lifesciences EW.

Globus Medical has an earnings yield of 4.9%, well ahead of the industry’s negative 0.7% yield. Its earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.8%. The company’s shares have rallied 15.5% against the industry’s 4.3% fall in the past year.

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

Intuitive Surgical, flaunting a Zacks Rank #1, has an earnings yield of 2.1% against the industry’s negative 0.7% yield. Shares of the company have risen 1.5% against the industry’s 4.3% fall. ISRG’s earnings topped estimates in each of the trailing four quarters, the average surprise being 13.2%.

Edwards Lifesciences, carrying a Zacks Rank #2 (Buy) at present, has an earnings yield of 3.6% against the industry’s negative 0.7% yield. Shares of the company have climbed 19.1% against the industry’s 4.3% decline. EW’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 5.5%.

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

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