Stock Analysis

Is Now An Opportune Moment To Examine Vivint Smart Home, Inc. (NYSE:VVNT)?

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NYSE:VVNT
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Vivint Smart Home, Inc. (NYSE:VVNT), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NYSE over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Vivint Smart Home’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Vivint Smart Home

Is Vivint Smart Home Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.2% below my intrinsic value, which means if you buy Vivint Smart Home today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $5.90, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Vivint Smart Home’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Vivint Smart Home look like?

earnings-and-revenue-growth
NYSE:VVNT Earnings and Revenue Growth August 11th 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Vivint Smart Home, it is expected to deliver a relatively unexciting earnings growth of 2.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in VVNT’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on VVNT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To that end, you should learn about the 3 warning signs we've spotted with Vivint Smart Home (including 2 which make us uncomfortable).

If you are no longer interested in Vivint Smart Home, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Vivint Smart Home?

Vivint Smart Home, Inc., together with its subsidiaries, engages in the sale, installation, servicing, and monitoring of smart home and security systems primarily in the United States and Canada.

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Rewards

  • Revenue is forecast to grow 7.16% per year

  • Earnings have grown 12.1% per year over the past 5 years

Risks

  • Earnings are forecast to decline by an average of 2.6% per year for the next 3 years

  • Negative shareholders equity

  • Shareholders have been diluted in the past year

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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