National Vision Holdings, Inc. (EYE): what the price requires
At today's price, National Vision Holdings, Inc. (EYE) is priced for today's economics sustained for ~5.2 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/EYE
Headline
| Field | Value |
|---|---|
| Ticker | EYE |
| Company | National Vision Holdings, Inc. |
| Current price | $19.28/sh |
| Composition | Revenues recognized at a point in time 94% / Revenues recognized over time 6% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 2.7% |
| Operating margin today | 4.8% |
| Margin compression implied | -2.1pp |
| Must persist for | 5.2y |
| Multiple paid | 22x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 10.1% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.7 years.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +0.49σ |
| cohort percentile (of 113 peers) | 55 |
| sustained it ~5.2 years at this level | 29% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.42x | 5 | expensive |
| Earnings | 3.10x | 4 | expensive |
| Relative | 0.90x | 5 | justifies |
| Growth | 0.76x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $38.27 | 0.50x | yes | FCF base $0.1B, growth 9% (input: historical growth), terminal g 4.0%, WACC 7.5%, 6yr projection |
| DCF Exit Multiple | Growth | $25.45 | 0.76x | yes | Exit EV/EBITDA: 11.0x / 13.0x / 15.0x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $20.35 | 0.95x | yes | P/E 24x (static sector reference · 2026-04), scenarios: 20.0x / 24.0x / 28.0x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $6.18 | 3.12x | yes | BV/sh $11.02, ROE (TTM) 5.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $4.36 | 4.42x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $16.66 | 1.16x | yes | Rev $2.0B, growth 9% (input: historical growth; tapered), Terminal P/S: 0.6x / 0.8x / 0.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $6.84 | 2.82x | yes | EPS $0.57, growth 2% (input: historical EPS growth), PEG=18.39 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $0.83 | 23.23x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.07B × (1−26%) / WACC 7.5% → EPV (no growth) (excluded from median) |
| Residual Income | Asset | $4.15 | 4.65x | yes | BV $11.02 + 5yr PV of (ROE (TTM) 5.2% − Kₑ 9.3%) × BV; BV grows 3.4%/yr |
| Graham Number | Asset | $11.89 | 1.62x | yes | √(22.5 × EPS $0.57 × BVPS $11.02) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $25.57 | 0.75x | yes | EBITDA $0.17B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $6.29 | 3.07x | yes | FCF $105.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $3.15 | 6.12x | yes | SBC-adj FCF $0.08B (FCF $0.11B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $18.39 | 1.05x | yes | EPS $0.57 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $3.19 | 6.04x | yes | BV $11.02 × (ROIC 2.2% / WACC 7.5%) |
| P/Sales Sector | Relative | $99.20 | 0.19x | yes | Revenue $2.02B × sector P/S 4.0x |
| PEG Fair Value | Relative | $21.38 | 0.90x | yes | EPS $0.57 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $6.16 | 3.13x | yes | EPS $0.57 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $174.8m |
| Net debt / NOPAT (after-tax) | 2.44x |
| Net debt / operating income (pre-tax) | 1.79x |
| Share count CAGR (buyback) | -3.7% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
At $16.77 the price implies roughly 21.8% company-wide operating-income growth per year for five years; the inversion reads the rate as within National Vision's recent range, so the real question is whether that pace can persist, not whether it is achievable once.
The valuation families disagree sharply: forward-growth and peer-multiple methods reach the price (DCF exit-multiple near $23, relative valuation near $20), while asset and earnings-power methods cluster near book value around $3 to $6, reflecting a thin trailing operating margin of about 3.9% and a return on equity below the cost of equity.
Q1 FY2026 was a genuine improvement, with revenue up 6.6% to $543.9 million and adjusted EPS of $0.45 versus $0.34, and management reaffirmed full-year adjusted operating income of $107 to $133 million on about 100 basis points of margin expansion; the whole thesis rests on that margin recovery being durable, with net debt near $175 million leaving limited room if it slips.
Bull Case
Optical retail is one of the few corners of brick-and-mortar that the internet has not hollowed out, because the prescription, the fitting, and the exam happen in person. National Vision sits at the value end of that trade. America's Best and Eyeglass World sell glasses and eye exams to budget-conscious and managed-care customers, and the company's FY2024 10-K describes a model built on owned and host-based stores plus a managed-care book that smooths demand (accession 0001710155-25-000011). The bull case starts here: this is a defensive, repeat-purchase category where the operator competes on price and access, not fashion cycles, and the recent numbers say the operating model is working again.
The first quarter of fiscal 2026 was the cleanest data point in a while. Net revenue rose 6.6% to $543.9 million and adjusted EPS jumped to $0.45 from $0.34 a year earlier, helped by a 5.1% rise in average customer spend and tighter payroll and advertising costs. Management reaffirmed full-year revenue of $2.03 to $2.09 billion and adjusted operating income of $107 to $133 million, with about 100 basis points of operating-margin expansion at the midpoint driven by SG&A leverage. That is the bull thesis in a sentence: higher ticket plus cost discipline on a stable traffic base, rather than a heroic unit-growth story.
At $16.77 (June 27, 2026) the price embeds company-wide operating growth of roughly 21.8% a year for five years. That sounds steep, but the inversion flags the rate itself as within what National Vision has recently delivered; the stretch is in how long it must persist, not the pace. The forward-growth and peer-multiple families both reach the price, with DCF exit-multiple landing near $23 and relative valuation near $20. If the company simply converts mid-single-digit comps and store additions (30 to 35 new stores guided for FY2026) into the margin expansion management is pointing at, the price looks like a reasonable bet on a recovering operator rather than a demanding one.
Bear Case
The advantage National Vision has leaned on is being chipped at from two sides. Its FY2024 10-K names the field plainly: it competes with independent eye care practitioners and opticians, with national chains like LensCrafters, Pearle Vision and Visionworks, and with online sellers of contact lenses and eyewear (accession 0001710155-25-000011). The value-price moat erodes when a Warby Parker or a Costco optical undercuts the convenience pitch, and when online contact-lens sellers peel off the repeat-purchase annuity that made each store visit recur. The same filing flags that its relationships with vision care professionals can be impaired by regulation, which could cause customers to go elsewhere for their optical needs. That is moat language describing its own fragility.
The earnings power underneath the recovery is still thin. Trailing operating margin is about 3.9% and the asset-based and earnings-power valuation families say the stock is expensive: earnings power value lands near $0.56 a share and the two-stage excess-return model near $4.36, both far below the price, because return on equity is only about 5.2% against a roughly 9.3% cost of equity. A retailer that earns below its cost of capital is not compounding book value; it is treading water. The bull's 21.8% implied operating growth has to come almost entirely from margin recovery, and history is not kind here: only about 35% of comparable fast-growers sustained that pace for five years.
The balance sheet narrows the room for error. Net debt sits near $175 million, net-debt-to-operating-income is about 2.2x, and interest expense is not separately broken out in recent filings, so the cushion is hard to size precisely. There is also a measurement wrinkle worth flagging: the EDGAR trailing operating income reads about $78 million while the record basis reads about $97 million, a divergence of roughly a quarter, which means the "20x operating income" the price implies is sensitive to which figure you trust. If the margin-expansion guide slips, the multiple is being paid for an operator that has not yet proven the higher margin is durable.
Valuation
The valuation methods split cleanly into two camps, and the split is the whole story. Group the models by what they lean on. The forward-growth and peer-multiple families reach the price: DCF exit-multiple lands near $23, EV/EBITDA relative near $26, and relative P/E near $20, all anchored to sector multiples and a continuation of mid-single-digit revenue growth. The asset and earnings-power families say the opposite: earnings power value, the excess-return models, and the FCF-yield approaches cluster between roughly $3 and $6, because they capitalize today's thin profitability with no credit for the margin recovery management is guiding to.
Inverting the price makes the tension explicit. At $16.77 the market is paying about 20x company-wide operating income, which solves to roughly 21.8% operating-income growth a year for five years at a 9.97% cost of capital. The model reads that as within range: the annual rate is consistent with what National Vision has recently delivered, and the demanding part is the duration, not the pace.
The honest read: this is not a deep-value name and not an obvious overpay. It is a bet that the FY2026 operating-margin expansion management has guided to (about 100 basis points at the midpoint, on $107 to $133 million of adjusted operating income) is real and durable. If it is, the growth and multiple families that reach the price are the right lens. If margin recovery stalls, the asset and earnings-power floor near book value is what the stock falls back toward. One note of caution on the inputs: trailing operating income reads differently across the EDGAR filing (about $78 million) and the record basis (about $97 million), so the implied multiple is sensitive to which base you anchor on.
Catalysts
Q1 fiscal 2026, reported May 13, 2026, was the key recent catalyst: net revenue of $543.9 million (up 6.6%), adjusted EPS of $0.45 against $0.34 a year earlier, and a 5.1% rise in average customer spend, with management crediting higher ticket and resilient managed-care demand. The beat came alongside tighter payroll and advertising costs (Motley Fool, AlphaStreet, Simply Wall St).
Management reaffirmed the full-year 2026 outlook: net revenue of $2.03 to $2.09 billion, adjusted comparable store sales growth of 3% to 6%, adjusted operating income of $107 to $133 million, and adjusted EPS of $0.85 to $1.09, with about 100 basis points of operating-margin expansion at the midpoint driven primarily by SG&A leverage (Investing.com, The Globe and Mail).
The forward drivers to watch are unit growth and premiumization. National Vision guided to 30 to 35 new stores in fiscal 2026 and highlighted becoming the exclusive eye care provider on all US Army and Air Force bases after adding 20 optical locations. The next quarterly print, expected in roughly the August window, is the test of whether the ticket-led comp and margin trend holds; a comp slowdown or a walk-back on the margin-expansion guide would be the clearest near-term risk to the recovery thesis (Simply Wall St, Motley Fool).
Peer Cohorts (Per Segment, With Filing Citations)
Owned & Host (reported)
- WRBY (Warby Parker Inc.)
- FY2025 10-K: …if they own significantly less than a majority of the outstanding shares of our Class A common stock, Class B common stock and Class C common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets. Moreover, because we are…
- FY2025 10-K: …any reason by providing AWS notice and closing our account and which AWS may do for any reason by providing us at least 30 days' notice or (ii) terminated for cause, which either party may do if the other party has an uncured material breach and which AWS may do immediately upon notice. AWS does not have an…
- BLCO (Bausch & Lomb Corp)
- FY2025 10-K: …Our administrative, marketing, research/laboratory, distribution and warehousing facilities are located in various parts of the world. We co-locate our R&D activities with our manufacturing at the plant level in a number of facilities. Our scientists, engineers, quality assurance/quality control professionals and…
- FY2025 10-K: …BHC in connection with the B+L IPO (the "MSA"), until BHC ceases to hold 50% of the total voting power of our outstanding share capital entitled to vote in the election of our directors, we will not be permitted, without BHC's prior written consent, (or, in certain circumstances, the approval of the BHC Board of…
- COO (The Cooper Companies, Inc.)
- FY2025 10-K: …appearing in this report are the property of their respective holders. DEPENDENCE ON CUSTOMERS No customer accounted for 10% or more of our consolidated net revenue in fiscal 2025 and 2024. See Note 12. Business Segment Information of the Consolidated Financial Statements for additional information. SEASONALITY…
- FY2025 10-K: …progress. Through our Connection & Belonging (C&B) strategy, we drive a culture where individual qualities and backgrounds are highly valued and respected, and our employees feel a sense of belonging. Our C&B strategy includes initiatives to promote C&B conversations and training to inform and educate our workforce,…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.