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Recent IPO Vizio Seeks To Profit From Shift To Streaming Video

Wall Street analysts on Monday initiated coverage of recent initial public offering Vizio (VZIO) with buy ratings, as the smart TV maker looks to follow the success of rival Roku (ROKU) in the advertising-supported internet video market. Vizio stock initially rose on the news but later reversed.




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At least five investment banks started coverage of Vizio stock with buy ratings.

“We believe Vizio is well positioned to capitalize on the streaming video market growth through its powerful combination of high-quality, affordable television hardware and award-winning streaming operating system,” Guggenheim analyst Michael Morris said in a note to clients. He rates Vizio stock as buy with a price target of 28.

On the stock market today, Vizio stock rose as much as 3.9% in early trading. However, it later turned south and ended the session down 1.3% to 23.69. Vizio stock went public March 25 with shares priced at $21.

Vizio Stock Can Follow Roku Template

Irvine, Calif.-based Vizio makes smart television sets and provides a platform for selling ads to users of its TVs. Vizio currently has 12.2 million active accounts in the U.S.

Vizio competes in the streaming video platform market with Amazon (AMZN), Alphabet‘s (GOOGL) Google, LG, Roku, Samsung and others.

Roku created a template that Vizio can follow to grow its services business, Needham analyst Laura Martin said in a note to clients. She rates Vizio stock as buy with a price target of 30.

“We believe Vizio has long-term platform economics upside, with robust connected-TV advertising revenue upside in 2021,” Martin said.

Early Days For Vizio Monetizing

Wells Fargo analyst Steven Cahall started Vizio stock with an overweight rating and price target of 31.

“We think it’s early days in connected-TV monetization with more eyeballs moving to streaming and the advertisers following with bigger budgets aimed at hard-to-reach audiences,” Cahall said in his note to clients. “Vizio’s control of both the hardware sales channel and connected-TV software is unique in the industry.”

Vizio stock has formed an IPO base with a buy point of 26, according to IBD MarketSmith charts. That buy point is 10 cents above the stock’s record high of 25.90, reached on March 31.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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