OVERVIEW
We added EYE as a best idea long as a way to play pent-up demand for medical services back in January 2021 at $48 versus the close of $63 yesterday. What we saw in optical related macro and alternative data series pointed to upside in same store sales and enough pent-up demand patient volume in the backlog to sustain above-average growth even into the second half of 2021, and likely beyond in our view. EYE was more conservative and guided the full year 2021 that pointed to second half same store growth coming in flat year over year. We were more optimistic based on the data series we've been tracking, but the company was right. Maybe it was Delta Variant, maybe the level of pent-up demand isn't as great as we thought. EYE still beat estimates for 3Q21 coming in slightly ahead of guidance and consensus, and for the year, the low end of the guide moves higher, but the gap between our expectations is too big for us to remain long.
We'll have a more complete view after their earnings call later this morning, but the difference between reported numbers and our expectations, we are moving to the Long Bench.
Link to preview note STOCK BRIEF | EYE | BEST IDEA LONG | INTO THE PRINT
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Thomas Tobin
Managing Director
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