VIZIO Holdings (VZIO) recently reported earnings for its second quarter of Fiscal Year 2022. Adjusted earnings per share came in at $0.01, which beat analysts’ consensus estimate of -$0.01. As a result, shares were up over 15% as of this writing on August 11. In the past eight quarters, VZIO has beat estimates four times.
In addition, sales increased 2% year-over-year, with revenue hitting $408.9 million compared to $401.1 million. The increase in revenue can be attributed to the strong growth of VIZIO’s Platform business, which grew 69% compared to last year.
However, gross profits decreased by 7%, which means that the company did not demonstrate any operating leverage since it did not increase more than revenue. Indeed, the gross margin contracted from 19.8% to 18.1%. Nevertheless, VZIO was able to reduce operating expenses from $88.4 million to $69.8 million, which ultimately led to its surprise profit of $2.3 million.
Investor Sentiment is Negative for VZIO Stock
The sentiment among TipRanks investors is currently negative. Out of the 553,246 portfolios tracked by TipRanks, less than 0.1% hold VZIO. Interestingly, the average portfolio weighting allocated towards VZIO among those who do have a position is 3.74%. This suggests that investors of the company are quite confident about its future.
However, in the last 30 days, 0.7% of those holding the stock decreased their positions. As a result, the stock’s sentiment is below the sector average, as demonstrated in the following image:
It’ll be interesting to see how this sentiment changes following today’s surge in price.
Is VZIO a Good Stock to Buy?
Turning to Wall Street, VZIO has a Strong Buy consensus rating based on seven Buys assigned in the past three months. The average VZIO price target of $15 implies 21.7% upside potential.
Takeaway – VZIO Has Demonstrated Its Resilience
VZIO has demonstrated the resilience of its dual revenue business model. During a time when its Devices segment fell 11%, its Platform segment more than offset it by rising 69% year-over-year. Management has also shown that it’s running the company responsibly as operating costs came down despite an inflationary period. Therefore, it’s easy to see why analysts have a positive view of the company.