The pandemic has led to an exponential increase in the use of digital technologies due to the imposition of social distancing standards and nationwide lockdowns. All over the world, people and organizations have had to adapt to new ways of working and living. As the world entered a lockdown mode, digital adoption in education, health, employment and more has been boosted. Gadgets are now an integral part of most people’s daily lives, whether for work, entertainment, or just to stay connected. This addiction to gadgets has led to an increase in incidents of computer vision syndrome (CVS) or digital eye strain.
The lengthening of screen durations and the resulting increase in eye fatigue have made it necessary to use corrective and anti-fatigue glasses. This has boosted the sales of anti-fatigue and anti-blue light lenses leading to overall market growth over the past one and a half years.
Prospects for optical care market broaden in the event of a pandemic
According to a WHO Global Vision Report (2019), nearly 2.2 billion people have visual impairment worldwide, of which 1 billion have vision impairments that have not yet been treated. Almost 2.6 billion people suffer from myopia, while 1.8 billion suffer from presbyopia.
According to a RESEARCHANDMARKETS report, in the midst of the COVID-19 crisis, the global eyewear market is estimated at $ 139.90 billion for the year 2020 and is expected to reach $ 197.20 billion by 2027, at a 5% CAGR.
The lenses market is expected to register a CAGR of 4.8% and reach $ 76.9 billion by 2026. After an initial analysis of the business implications of the pandemic and its associated economic crisis, the growth of the frames segment is readjusted to a CAGR of 5.8%.
The growth can be attributed to the growing awareness of the population regarding different eye diseases such as myopia, hyperopia, dry eye syndrome and astigmatism among others. Besides, the increasing prevalence of different eye problems in the world is expected to drive the market.
Actions with great future potential
The following four stocks offering optical care solutions are well positioned to win amid growing demand for eye care products.
Price performance during the pandemic
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Alcon Inc. ALC is our first choice. In the second quarter of 2021, the company’s revenue improved by 74.8% compared to last year thanks to the improvement in the eye care market, thanks to a strong recovery in the United States. United and at varying rates of recovery in international markets after the COVID-19 pandemic. Total Vision Care (including contact lenses and eye health) increased 49% year over year. The company continues to witness strong demand for Precision1, Systane and Pataday.
In August 2021, the company announced its intention to launch TOTAL30 – the first and only monthly replacement, the Water Gradient lens that looks like nothing even on day 30. Alcon previously discussed the chances of the TOTAL30 sphere being commercially available. in the beginning. September 2021. In Europe, TOTAL30 will be deployed in a limited number of countries in 2021, with full commercial availability in early 2022. In particular, reusable lenses represent approximately 45% of the global contact lens market of $ 9 billion. This opens up a huge opportunity for Alcon to expand into the reusable lens market.
The company currently carries a Zacks Rank # 2 (Buy). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks here.
National Vision Holdings, Inc. EYE is our second choice. The company continues to gain on strong positive comparable store sales (comps) in eyewear. In the second quarter of 2021, adjustable comparable store sales growth was 76.6%. Eyeglass World recorded an increase of 67.6% and America’s Best recorded an increase of 81.8%. The Legacy segment saw an increase of almost 58.2% in compensation. The increased pandemic-induced demand for low-cost eye exams, glasses and contact lenses contributed to the achievement of an exceptional second quarter. The contact lens category continued to experience average ticket growth as contact lens customers increasingly adopt new technology lenses that have higher prices – a trend that is expected to continue. National Vision has increased the long-term projected white space opportunities from 300 stores to at least 2,150 locations (as of 2021). He expects the optical category in a post-COVID environment to remain poised for expansion.
The company currently wears a Zacks Rank # 3 (Hold).
Cooper, Inc. COO is the third choice. The Company’s CooperVision segment maintained its leadership position in the specialty lens markets, supported by highly proprietary products from Biofinity and Clariti. The company’s flagship silicone hydrogel lenses are also expected to continue to generate strong sales in the coming quarters. In the third fiscal quarter, MiSight and Ortho K grew by 187% and 68% respectively. By management, based on current observed strength, the company expects this portfolio to generate $ 65 million in revenue in fiscal 2021 and exceed $ 100 million in fiscal 2022. The company has also experienced substantial growth across all of CooperVision’s Toric, Multifocal, single-use products. sphere, non-disposable sphere subunits. In addition, silicone hydrogel dailies increased by 31%, with good performance for MyDay and clariti.
The company currently carries a Zacks Rank # 3.
Last but not least is EyePoint Pharmaceuticals, Inc. EYPT. The company is focused on the development and commercialization of therapies to help improve the lives of patients with severe eye disorders. Currently, the company has two commercial products: DEXYCU – the first intraocular product approved for the treatment of postoperative inflammation, and YUTIQ – a three-year treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. The company continues to witness higher demand for its two commercial products. During the second quarter of 2021, customer demand for YUTIQ increased by nearly 540 units and approximately 10,900 units for DEXYCU, reflecting an increase of 26% and 404%, respectively, compared to the second quarter of 2020. Based on the continued momentum, the company continues to see strong customer demand for both products in the third quarter as well. Additionally, the company is making significant progress with the DAVIO Phase 1 trial for EYP-1901.
The company currently carries a Zacks Rank # 3.
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