Why Vizio Stock Is A Perfect Buy After Its IPO

That's not to say that the devices side of the industry is going away. Vizio sells its smart TVs through several platforms, including retail and online. Its products are given strategic shelf space at the retail level at both Target Corp. (NYSE: TGT) and Walmart Inc. (NYSE: WMT), two leaders in audio/video device sales.

Most of the televisions being sold in the United States are Smart TVs today. In 2020, they were 93% of all televisions shipped. Vizio has 14% of the market right now, which puts them third behind Samsung and TCL.

Vizio sold about 7 million smart TVs last year and estimates that it can grow that part of the business at a low single-digit rate over the next few years. Every buyer is potentially a customer for SmartCast and Platform+.

In 2020, Vizio converted 65% of Smart TV buyers into SmartCast Active Accounts for 4.6 million new active accounts.

In addition to the streaming services, analysts see opportunities to develop e-sports platforms, sports betting apps, and shopping services as future additions to Platform+ revenue.

There is even talk of offering educational and exercise classes through Platform+.

Vizio is a company very much in transition. Although it is not going to stop selling Smart TVs, the plan is to continue to grow the Platform side of the business. Thanks to its outsourcing of manufacturing the TVs, its devices division has decent profit margins at right around 10%.

Platform+ margins should be spectacular at around 60%.

If the company meets analysts' expectations of almost $1.4 billion in Platform+ revenue by 2026, operating cash flows could increase by over $800 million.

Why Vizio Stock Is a Buy Now

Vizio has been around since founder Willian Wang started building making cutting-edge televisions in 2002. For you "buy American" enthusiasts, Vizio is based in Orange County, Calif. The company also has offices in Irvine, Calif., and offices in Dakota Dunes, Dallas, Denver, Seattle, San Francisco, and New York City.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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