Smart TV maker Vizio NASDAQ: VZIO stock is an under-the-radar play as a streaming platform and early holiday sales demand. The maker of value Smart TVs also operates its Platform+ which includes its SmartCast operating system integrated into each television set. The Company is transitioning toward a Roku Inc. (NASDAQ: ROKU) model as it builds up its network of ad-supported free channels in attention to growing third-party streaming services. The Company experienced a spike during the pandemic but should continue to grow post-pandemic with the reopenings as they have double the number of advertisers. The Company doubled its direct advertiser base and tripled average revenue per advertiser. The network of active users has grown 40% to over 14 million. The Company has high hopes for it’s 2022 Ultra HD TVs complete with voice remote capabilities also catering to gamers. However, Vizio faces real competition from Amazon NASDAQ: AMZN as they recently announced plans to release it’s own line of Smart TVs. With the holiday shopping season approaching as the Company continues to build out it ecosystem, prudent investors can watch for opportunistic pullbacks in shares of Vizio.
Q2 FY 2021 Earnings Release
On Aug. 4, 2021, Vizio released its fiscal second-quarter 2021 results for the quarter ending June 2021. The company reported an earnings-per-share (EPS) loss of (-$0.08) excluding non-recurring items versus consensus analyst estimates for a loss of (-$0.06), missing estimates by (-$0.02). Revenues rose 2% year-over-year (YoY) to $401.16 million beating analyst estimates for $390.22 million. Platform+ net revenues climbed 146% YoY to $66 million as SmartCast Active accounts grew 43% YoY to 14 million. Average revenue per user grew 90% to $16.76. The company launched its 2022 4K Ultra HD TVs and the “industry’s best color range”. Vizio has surpassed over 11 million TVs capable of dynamic ad insertion. Vizio CEO William Wang commented, “VIZIO delivered excellent second quarter results driven by strong advertising growth, a direct benefit of our expanding dual revenue model. Our increased revenue, gross profit and adjusted EBITDA in the second quarter is a testament to our talented team, who rose to the challenges that we and many other industries continue to face as a result of the global pandemic. We continue to invest heavily in our talent, adding nearly 200 jobs throughout the company in the first half of 2021 as we ramp up our numerous CTV initiatives. With our Platform+ business continuing its rapid growth trajectory, supported by our ongoing investments in our software and hardware integration, we are excited about the path we are on during a transformative time in the media and entertainment industry.”
Conference Call Takeaways
CEO Wang set the tone, “We are meeting this demand by investing extraordinary collection of Smart TVs account with our building streaming platform, SmartCast. Broadcast streams billions of hours of multi-content across Atmos, AVOD and free ad-supported streaming tunnels, all through one easy-to-use interface. No need for consumers to go buy another bundle or box to stream their favorite shows. We’re complementing TVs with a range of market-leading support that feature the latest Serono technologies to deliver a big-screen experience in the comfort of their home. Each spring, we have a part of refresh where we deliver our new collections to the market. We use this as the time to deliver a later technology at most affordable prices. For example, this year, we added to SmartCast, a new functionality called VIZIO Voice. VIZIO Voice allows users to more quickly search and discover content within SmartCast by simply talking to the TV. Most of the latest models now come with our new Bluetooth-enabled VIZIO Voice remote. We also continue to ensure broad IoT compatibility with support for Apple Air freight, Amazon Alexa and Google Assist.”
Gaming Market
Interestingly, Vizio continues to enhance its TVs for gaming, “We also further strengthen our position in the rapidly growing gaming market with over half of our TV collections now being AMD FreeSync certified. The new product has been very well-received by China customers seeing high Star review ratings by consumers as well. For Smart TVS, this recognition ranges for entry-level D series all the way to our premium models. Just to name a few examples. Our D series was recognized as additive choice for 2021 in USA today’s review. And our premium older model won the Tanki Awards for 2021. In addition, new features such as our VIZIO Voice capability has been recognized by influential publishers such as CNET. Our diverse range of soundbars also continue to receive awards from highly respected outlets. With our premium Atmos models being featured in Newsweek and Wired.”
Expanding Streaming Content
CEO Wang stated, “Speaking of content, we’ve been very busy. The DNA has seen just yesterday, we announced that we have reached agreement to bring two new marquee apps to our platform BET+ and Discovery+. We are thrilled to offer these premium content apps to millions of SmartCast users. BET+ is available now and Discovery+ that’s targeting a September launch. Today, I’m also very excited to announce another assistant to our content lineup. FuboTV will be joining our platform in the coming weeks, just in time for football season. SmartCast users will be able to subscribe to the virtual MVPD service right on our home screen. In addition to FuboTV, we have also launched streaming from Hallmark, PBS, The Space Channel and LEGO TV and our WatchFree service had 32 more free ad-supported channels during the quarter. So to say the least, it has been a very busy time for our company acquisition team. And there’s so much more to come. On the back of our live content, we use often first-party data to gain insight into our users’ presence.”
VZIO Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for VZIO stock. The weekly rifle chart has been in a downtrend with the 5-period moving average (MA) falling at $19.49. The $18.11 Fibonacci (fib) level has provided a near-term support as the weekly stochastic has been smothered under the 20-band indicating an extreme oversold condition. The weekly 15-period MA is still falling at $22.33. The weekly lower Bollinger Bands (BBs) sit at $16.27. The daily rifle chart has been downtrending since the market structure high (MSH) sell triggered on the breakdown through $25.06. The daily market structure low (MSL) buy trigger is above the $19.54 level. The weekly is attempting an inverse pup breakdown as the 5-period MA attempts to hold resistance at $18.77 as the daily stochastic crosses back down. The daily 15-period MA is the last resistance at $19.28 with daily lower BBs at $17.57. Prudent investors can watch for opportunistic pullback levels at the $18.11 fib, $17.25 fib, $16.27, $15.21 fib, and the $14.13 fib. Upside trajectories range from the $23.93 fib up towards the $34.37 fib.
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