Digital Healthcare And Aging Populations Will Fuel Online Vision Care Growth

Key Takeaways

• Expansion into premium categories, digital services, and subscriptions is driving sustainable profit growth, boosted by early success in capturing higher-margin customers.
  
• Strong operational leverage, rapid store profitability, and sector consolidation readiness position Mister Spex for accelerated earnings and market leadership in integrated vision care.
  
• Heightened competition, margin pressure, and challenges scaling physical retail threaten Mister Spex's revenue growth, customer acquisition, and long-term profitability despite selective strategic initiatives.

Catalysts

Provides and markets eyewear products in Germany and internationally.

• Analyst consensus expects the SpexFocus transformation to deliver over 20 million euro annualized EBITDA impact, but with 90% of stores now breakeven or profitable and a proven new playbook for rapid new store profitability, Mister Spex may be positioned for much larger scale-driven EBIT improvements and an accelerated margin inflection, significantly lifting group earnings as operational leverage increases.
  
• While consensus expects product and store mix improvements (private label, subscriptions) to enhance gross margins, early evidence from the SWITCH model-where subscription customers generate more than double the average order value and vastly higher multifocal lens penetration-suggests a much faster and more substantial shift to premium, high-margin categories, underpinning sustainable net margin and gross profit expansion far beyond current projections.
  
• Rapid adoption of digital eye health services and subscriptions, combined with proprietary tech investments (virtual try-on, digital measurements), positions Mister Spex to be the dominant integrated online/offline vision care provider in Europe, accelerating new customer acquisition and recurring revenue growth as healthcare digitalization trends gain momentum and expand the total addressable market.
  
• The company's combination of strong liquidity, reduced cost base, and a playbook for swift new store ramp-up uniquely position it to turn sector consolidation to its advantage-allowing selective, accretive M&A or exclusive partnerships that could boost topline growth and create substantial cost synergies, both accelerating operating profit growth.
  
• With a rapidly aging customer base and a targeted focus on capturing high-value, older demographics through differentiated services like Eye Health Check and tailored multifocal offerings, Mister Spex is poised to disproportionately benefit from the secular tailwinds of rising vision correction demand, supporting structural revenue growth and enhanced long-term earnings visibility.

Mister Spex Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Mister Spex compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Mister Spex's revenue will grow by 1.5% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from -40.2% today to 0.7% in 3 years time.
• The bullish analysts expect earnings to reach €1.5 million (and earnings per share of €0.04) by about September 2028, up from €-79.2 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 166.9x on those 2028 earnings, up from -0.7x today. This future PE is greater than the current PE for the DE Specialty Retail industry at 21.1x.
• Analysts expect the number of shares outstanding to decline by 1.17% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.3%, as per the Simply Wall St company report.

Mister Spex Future Earnings Per Share Growth

Risks

• Persistent declines in net revenue, including management's latest guidance of a 10% to 20% fall for 2025 and sharp drops internationally, highlight ongoing challenges with competitive promotional pressure and suggest Mister Spex may struggle to return to sustained revenue growth.
  
• Increasing competition from both low-cost online players and vertically integrated industry giants is driving up market-wide promotional activity, compressing Mister Spex's gross profits, and threatening its ability to defend long-term net margins as eyewear grows more commoditized.
  
• The company's decision to avoid deep discounting and focus on higher-margin, loyal customer segments could constrain customer acquisition and overall market share, risking further erosion of top-line revenues if broader consumer preferences continue to shift toward instant gratification and convenience at the lowest price.
  
• The sustainability of improvements to store-level profitability is uncertain, as Mister Spex's physical retail footprint remains relatively young, is dependent on hiring and retaining skilled personnel in a tight labor market, and requires ongoing investment to scale profitably-failing which, selling, general and administrative costs may stay elevated relative to future revenue.
  
• While new initiatives such as the SWITCH subscription drive higher average order values and margins, Mister Spex faces execution risk in further integrating digital and retail experiences, while also needing to keep pace on customer-facing technologies and comply with tightening regulations-potentially raising operating costs and capping improvement to long-term earnings.

Valuation

• The assumed bullish price target for Mister Spex is €6.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Mister Spex's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €6.0, and the most bearish reporting a price target of just €1.7.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be €206.1 million, earnings will come to €1.5 million, and it would be trading on a PE ratio of 166.9x, assuming you use a discount rate of 8.3%.
• Given the current share price of €1.72, the bullish analyst price target of €6.0 is 71.3% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.