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Here’s Why VZIO Stock Surged 15% on August 11

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VZIO Stock surged in Thursday’s session after reporting earnings results that were better than expected. 

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.


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