The stock of Canadian eyewear and lens retailer KITS Eyecare rose by more than 6% on the Toronto Stock Exchange. The company announced the launch of a new line of daily contact lenses under its own brand.
Details
KITS Eyecare shares increased by 6.11% on the Toronto Stock Exchange on Wednesday, reaching CAD8.33. The company announced the launch of a line of daily silicone hydrogel contact lenses under its own brand, which will be priced “significantly lower” than comparable products.
In Canada, glasses and lenses can be obtained with a prescription, either with a co-payment or without charge, depending on the client’s insurance. According to a survey conducted by KITS, two out of three clients lack sufficient insurance coverage to meet their eye care needs. Additionally, in early June, the company announced an agreement that would allow it to bill directly to 38 insurance companies, covering 70% of Canadians. This would provide the widest coverage in the segment, noted KITS.
Context
The global contact lens market was valued at $17.14 billion in 2022 and is expected to grow nearly 9% annually until 2030. Silicone hydrogel lenses accounted for over 88% of global revenue in 2022, according to Grand View Research data cited by the company. These are modern soft lenses, believed to allow more oxygen to pass through than conventional soft hydrogel contact lenses, the company notes.
Stock performance
Over the past 12 months, KITS’ market value has nearly doubled. On May 8, the company reported record revenue for the first quarter of 2024, amounting to CAD34.8 million, a 26% year-on-year increase. The company’s stock reacted with an 11% rise. In the last month, the shares have risen by more than 30%. According to FactSet, six analysts are tracking KITS, all of whom recommend buying its stock. The average target price is CAD 9.9.
