Is VIZIO Headed for a Breakdown?
A support level has formed in the chart of VIZIO Holding Corp (VZIO). The stock has repeatedly bounced on top of that key level and appears to be fall...
A support level has formed in the chart of VIZIO Holding Corp (VZIO). The stock has repeatedly bounced on top of that key level and appears to be falling back down to that support again. If the stock falls through the support level, a breakout could soon occur.
VIZIO Holding Corp (VZIO) operates two distinct integrated businesses: Device and Platform+. Through Device business, it offers a range of high-performance Smart TVs designed to address specific consumer preferences, as well as a portfolio of soundbars that deliver immersive audio experiences.
The company has been gaining on strong sales of its high-quality Smart TVs and premium soundbars. VZIO also launched numerous successful ad campaigns on America's top TV networks. This led to the company surpassing 11.2M addressable TVs across the U.S. for its platform business.
The company has a current ratio of 1.4, which indicates it has more than enough liquidity to handle short-term debt. Management is also quite efficient with a return on equity of 30.9%. While sales are expected to rise up 4.1% over the next year, EBITDA is expected to fall 41.9%. VZIO is also reporting earnings today, so keep an eye out for that.
The stock appears overvalued with a trailing P/E of 41.92 and a forward P/E of 51.28. VZIO stock has shown mixed performance since April and has recently been trending downward as shown in the chart below.
Take a look at the 6-month chart of VZIO below with added notations:
Chart of VZIO provided by TradingView
After IPOing earlier in the year, VZIO has repeatedly bounced on top of a key level of support at $21 (green). The stock appears to be falling back down to that support again, and another rally could start from there. However, a break of $21 could mean much lower prices for the stock.
If the stock were to break below the support, a trader could enter a short position under $21 with a protective stop placed above the $21 level.
Want to Discover More Great Trades?
I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don't work at all.
That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!
Have a good trading day!
Christian Tharp, CMT
VZIO shares were trading at $21.52 per share on Wednesday morning, down $0.14 (-0.65%). Year-to-date, VZIO has gained 12.67%, versus a 18.38% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.Is VIZIO Headed for a Breakdown? appeared first on StockNews.com
Entrepreneur Editors' Picks
This Founder Quit His 'Prison'-Like Teaching Job Within 2 Months. Now, He and His Sister Are Helping Other Teachers Leave the Classroom and Achieve Financial Freedom.
If You Focus on Problems, You'll Only Find More Problems. Here's How to Focus on Solutions.
Facing More Than 15 Years in Prison, This Founder Transformed His Hustle Into a Powerful Personal Brand and Business. Now, He's Giving Back in a Big Way.
Apple Asks This Jarring Interview Question as a Secret Way to Evaluate a Candidate