VIZIO Holding Corp. (VZIO) DCF Valuation & Fundamental Primer
VIZIO Holding Corp. (VZIO) currently trades at $11.35 with an enterprise value of $2.96B. Our proprietary institutional model rates VIZIO Holding Corp. at 91/100 (Grade: A+ · Elite SaaS Compounder). The current market price prices in an implied 5-year revenue CAGR of 12.6% vs. historical growth of 22.3% (Substantial Margin of Safety).
Institutional fundamental teardown of VIZIO Holding Corp. (VZIO) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
VIZIO Holding Corp. (VZIO) 3-Scenario DCF Valuation Range
Stress-test VZIO's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $11.35).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $17.59 +55% | $18.64 +64% | $19.87 +75% | $21.32 +88% | $23.05 +103% |
| 9.3% | $15.89 +40% | $16.72 +47% | $17.67 +56% | $18.77 +65% | $20.06 +77% |
| 10.0% | $14.49 +28% | $15.15 +34% | $15.91 +40% | $16.77 +48% | $17.76 +57% |
| 10.8% | $13.32 +17% | $13.86 +22% | $14.47 +28% | $15.16 +34% | $15.94 +40% |
| 11.5% | $12.33 +9% | $12.78 +13% | $13.28 +17% | $13.84 +22% | $14.47 +27% |
Institutional Software Quality Scorecard (91/100 · Grade A+)
Exceptional unit economics, disciplined equity dilution, and fortress balance sheet.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Zero-debt fortress balance sheet with abundant net cash liquidity
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 173% of EBIT driven by upfront annual collections
- Top-quartile software unit economics: 80.7% gross margin and 49.6% Rule of 40 score
- Fortress capital structure: Zero debt and $263.6M in pure net cash
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into VZIO?
The current share price only requires 12.6% 5-year CAGR (21.6% dilution-adjusted), well below historical growth of 22.3%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (12.0% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 21.6% 5-year revenue CAGR to justify $11.35/sh on a true per-share economic cash flow basis.
VIZIO Holding Corp. (VZIO) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $359.1M | $359.1M | $439.2M | $537.2M | $656.9M | $803.4M | $982.6M |
| Gross Profit | $289.8M | $289.8M | $354.4M | $433.5M | $530.2M | $648.4M | $793.0M |
| Operating Income (EBIT) | $56.7M | $56.7M | $69.4M | $84.9M | $103.8M | $126.9M | $155.3M |
| Stock-Based Compensation (SBC) | $43.1M | $43.1M | $52.7M | $64.5M | $78.8M | $96.4M | $117.9M |
| Unlevered Free Cash Flow (FCF) | $98.0M | $98.0M | $119.9M | $146.6M | $179.3M | $219.3M | $268.3M |
| SBC-Adjusted True Cash Flow | $54.9M | $54.9M | $67.2M | $82.2M | $100.5M | $122.9M | $150.3M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -32.6 + 0.85 × (Rule of 40) · R² = 74%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| VIZIO Holding Corp. | VZIO | $2.30B | $359.1M | 80.7% | 27.3% | 49.6% | 12.0% | 5.7× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 5.7× | $2.03B | $2.30B | $11.35 | 0.0% |
| -20% Multiple Compression | 4.5× | $1.63B | $1.89B | $9.34 | -20.0% |
| -35% Multiple Compression | 3.7× | $1.32B | $1.59B | $7.83 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $1.80B | $2.06B | $10.17 | -11.8% |
Frequently Asked Questions: VIZIO Holding Corp. (VZIO) Valuation
What is VIZIO Holding Corp. (VZIO)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, VIZIO Holding Corp. (VZIO) has a Base Case implied value of $15.91 per share (with a Bear Case of $7.35 and a Bull Case of $28.13), compared to its current price of $11.35. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is VIZIO Holding Corp. (VZIO)'s Rule of 40 score and Free Cash Flow margin?
VIZIO Holding Corp. achieves a Rule of 40 score of 49.6%, combining a 22.3% revenue growth run-rate with a 27.3% TTM free cash flow margin on $359.1M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into VZIO stock according to Reverse-DCF analysis?
At $11.35 per share (Enterprise Value of $2.03B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 12.6%, compared to VIZIO Holding Corp.'s historical CAGR of 22.3%. Overall market expectations are rated as "Substantial Margin of Safety".
How does VIZIO Holding Corp. compare to Software & Cloud Services software peers?
VIZIO Holding Corp. (VZIO) earns an institutional Software Quality Score of 91/100 (Grade A+ — Elite SaaS Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact VIZIO Holding Corp. (VZIO)'s valuation?
VIZIO Holding Corp. recorded $43.1M in TTM stock-based compensation (12.0% of revenue). When treating SBC as a cash-equivalent compensation expense, VIZIO Holding Corp.'s SBC-adjusted free cash flow yield is 2.4%, scoring 16/25 on our Shareholder Dilution Friction pillar.