Vizio Offers One-Time Equity Grant; Analyst Slashes EPS Forecast

Vizio Holding Corp. (VZIO), a provider of smart televisions, sound bars, and accessories, announced the offering of a one-time equity grant to senior executives that vested over one year. Shares spiked around 18% to reach an intraday high of $27.62 on June 15. (See Vizio stock analysis on TipRanks)

So, What Happened?

Following the news, Needham analyst Laura Martin raised the company’s second-quarter revenue and EBITDA estimates but slashed the EPS estimates.

Martin cited the following reasons for the revisions, “Stronger average selling pricing for devices, reflecting price increases across the industry as well as fewer promotions y/y; and A 1x equity grant to senior execs that vested over a 1-year period, resulting in higher SBC costs.”

The analyst now expects Vizio’s Q2 revenue and adjusted EBITDA to be $407.4 million and $13.8 million, respectively.

She estimates a second-quarter loss of $0.14 per share, much higher than the earlier estimated loss of $0.07 per share.

For the full Fiscal year 2021, revenue and adjusted EBITDA are pegged at $2.28 billion and $74 million, respectively.

Also, the FY21 adjusted loss is pegged at $0.44 per share, 76% below the previous estimate.

In the previous quarter, the company reported revenues of $505.7 million, surpassing the Street’s estimate of $484.07 million. Adjusted earnings came in at $0.02 per share, while analysts had estimated a loss of $0.10 per share.

Martin assigned a Buy rating to the stock and said, “Vizio represents a pure-play way to play Connected TV (CTV) advertising growth, coupled with platform economics upside, in our view.”

The analyst set a price target of $30 for the stock, which implies 28.5% upside potential to current levels.

The Wall Street community has a Strong Buy consensus rating on the stock based on 7 unanimous Buys. The VZIO average analyst price target of $30.29 implies 29.7% upside potential to current levels. Shares have gained 22.3% over the past six months.