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3 Audio Video Stocks to Focus on as Industry Witnesses Tailwinds
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The Zacks Audio Video Production industry participants like Sony Group Corporation (SONY - Free Report) , Dolby Laboratories, Inc. (DLB - Free Report) and Sharp Corporation (SHCAY - Free Report) are likely to benefit from investments in cutting-edge technology solutions that drive enhanced communication experiences. Streaming, creator content, gaming and AI-powered tools are reimagining value creation across the industry. Rapid technological advances, such as 4K, 8K and immersive audio formats, are boosting demand for new devices, which bodes well for participants like Dolby. The players also stand to gain as they increase focus on direct-to-customer sales channels
Macroeconomic challenges loom large. Global macroeconomic uncertainty amid escalating trade tensions, tariffs and associated inflationary pressure is likely to keep consumer spending in check. This does not bode well for the participants. A highly promotional environment and stiff competition from importers of comparatively low-priced devices are denting margins. Online accessibility of recording equipment and the availability of distribution channels on the Internet are additional headwinds.
Industry Description
The Zacks Audio Video Production industry comprises television, speaker, video player and camcorder manufacturers. It includes companies that offer gaming consoles, drones and high-end cameras for individuals and industrial markets. These firms provide state-of-the-art audio, imaging and voice technologies that enhance entertainment and communication experiences. Some industry participants develop audio and imaging products, including digital cinema servers and products for film production and entertainment industries. Apart from providing theatrical and television production services for cinema exhibitions, broadcast and home entertainment, these companies work with film studios, content creators, broadcasters and video game designers. Some prominent players are present in the music and image-based software markets worldwide.
4 Trends Shaping the Future of the Audio-Video Production Industry
Technological Advancement to Spur Growth: From rapid technological advances like 4K, 8K and immersive audio formats, the demand for high-resolution visual and audio experiences is a major growth driver. The rise of streaming or OTT platforms is fueling this trend, as consumers and businesses seek to recreate a cinematic atmosphere at home. Gaming is another catalyst, as PC and console gamers now seek enhanced visuals and immersive sound design. The rise of the creator economy is also fueling demand for enhanced cameras and editing tools. Industry players like GoPro are benefiting from this trend, as its cameras are popular among creators. Automotive audio represents another lucrative opportunity as vehicles become more software-driven and experience-focused.
Increasing Demand for Premium Entertainment: The industry performed well despite drastic changes in how media is consumed and distributed. The rise in demand for premium entertainment from record labels, TV producers and advertisers is likely to stoke profitable growth. Strong demand across all regions with a more direct-to-consumer, subscription-centric model bodes well for industry participants.
Macroeconomic Headwinds Likely to Hurt Consumer Demand: The global macroeconomic uncertainty, amid escalating trade tensions and tariffs, and associated inflationary pressures, are likely to keep consumer spending, especially discretionary purchases, in check. While companies keep investing in market share gains and supply-chain resilience, a shortage of critical hardware components due to disruption in the supply chain could hurt revenues in the near term. Fluctuations in commodity pricing for different components are additional concerns. Elevated promotional activity to boost sales amid weak spending is also affecting the performance of these industry participants.
Aggressive Competition: In the United States, smart-connected televisions, microphones and speaker enclosures are the most popular electronic devices among customers. However, U.S.-based manufacturers of audio and video systems face intense competition from importers of comparatively low-priced devices, particularly from China, Vietnam and Mexico. These firms face stiff competition across all end markets, often leading to intense price wars and margin contraction.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Audio Video Production industry is housed within the broader Zacks Consumer Discretionary sector. It currently has a Zacks Industry Rank #35, which places it in the top 15% of more than 243 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Before we present a few audio-video production stocks you may want to consider for your portfolio, let’s look at the industry’s recent stock market performance and valuation picture.
Industry Outperforms the Sector and the S&P 500
The Zacks Audio Video Production industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite in the past year.
The industry has jumped 25.1% over this period compared with the S&P 500’s growth of 18.2%. The broader sector is up 2.2% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
Price-to-earnings is commonly used for valuing audio-video production stocks. The industry has a forward 12-month P/E of 20.86X compared with the S&P 500’s 23.3X. It is above the sector’s forward 12-month P/E of 18.62X.
In the past five years, the industry has traded as high as 23.71X and as low as 11.72X, with a median of 16.63X, as the chart below shows.
Price-to-Earnings Forward Ratio (Past Five Years)
3 Audio Video Production Stocks to Keep an Eye on
Sony Group Corporation: Headquartered in Tokyo, Japan, Sony designs, manufactures and sells several consumer and industrial electronic equipment. The company’s product roster comprises audio and video equipment, televisions, network services, game hardware and software, mobile phones and image sensors. Sony is also active in producing, acquiring and distributing recorded music and managing and licensing lyrics and music for songs.
Strategic shift toward an entertainment-focused business has been Sony’s key growth driver over the years. In recent years, it has increasingly relied on expanding its content offerings across games, music, film and TV. The company has also prioritized the growth of its intellectual property across various business areas, made strategic investments in content, music catalogs and emerging sectors such as anime, and advanced the development and use of innovative technologies to support content creation.
Sony’s G&NS segment is on a steady track, driven by the continued growth of PlayStation 5 in both active users and user spending. PlayStation’s monthly active users rose 3% year over year in September to 119 million and total play time for the quarter also grew 1%. For fiscal 2025, the sales forecast has been revised upward by 3% from the previous view, led by favorable forex movements and solid hardware sales.
The sports business gained momentum with the STATSports buyout. Combining its data with Hawk-Eye and KinaTrax is likely to deliver top-tier sports analytics and drive overall growth. However, business volatility in the second half, along with a slowdown in the imaging market, remains a concern.
The Zacks Consensus Estimate for its fiscal 2025 bottom line is pegged at $1.20, unchanged in the past 30 days. Shares have gained 26.5% in the past year.
Price and Consensus: SONY
Sharp Corporation: SHCAY is a Japan-based company engaged in the manufacturing and sales of electric and electronic application equipment, and electronic components, along with telecommunications equipment.
In the second quarter of fiscal 2025, management highlighted “Under the Medium-Term Management Plan,” the company has been making progress in boosting profitability across all businesses. As a result, in the fiscal second quarter, SHCAY noted that operating profit improvement topped initial expectations. Also, its Smart business segment (supports customer DX through data and AI usage) reported nearly double-digit growth year on year in the first half. This was driven by higher demand for office-related services.
With the launch of Unveiled LDK+, its second EV concept model, Sharp Corporation is looking to enter the EV market in fiscal 2027. The company’s equity ratio during the first half improved to 14.6% backed by smooth asset sales. Management revised its fiscal 2025 earnings forecast upward due to better-than-expected fiscal second-quarter numbers for the PC business and improved tariff effects on operating profit.
At present, SHCAY carries a Zacks Rank #2. The Zacks Consensus Estimate for its fiscal 2025 bottom line is pegged at 7 cents, unchanged in the past 30 days. Shares have lost 23.1% in the past year.
Price and Consensus: SHCAY
Dolby Laboratories: San Francisco-based Dolby develops audio and imaging technologies that revolutionize entertainment for user-generated content, TV shows, films, music and gaming.
Dolby continues to see strong engagement across its ecosystem of creators, distributors and device OEMs for its Dolby Atmos and Dolby Vision technologies. In the fiscal quarter of 2025, within the TV segment, leading global manufacturers such as Hisense and TCL were the first to commit to Dolby Vision 2. Wearable adoption also accelerated, with Meta integrating Dolby Atmos and Dolby Vision into its Meta Quest headset and Samsung adding Dolby Atmos to its Galaxy XR.
Dolby is extending its presence in the automotive market, driven by strong demand from OEMs to elevate in-car entertainment quality. During fourth-quarter fiscal 2025, Dolby signed new agreements with major brands such as Maruti Suzuki, India’s largest passenger vehicle company, with more than 40% market share, along with Deepal in China and VinFast in Vietnam. Several manufacturers, including Cadillac, Zeekr, Li Auto, Mahindra and Mercedes, launched new models featuring Dolby technologies.
However, concerns persist due to macroeconomic weakness, ongoing tariff uncertainty and intense competition. For fiscal 2026, it expects full-year revenues to decline by high single digits in CE and PC. The company expects revenues to be in the $1.39-$1.44 billion band.
At present, DLB carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at $4.20, up two cents in the past seven days. Shares have declined 13.5% in the past year.
Price and Consensus: DLB
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3 Audio Video Stocks to Focus on as Industry Witnesses Tailwinds
The Zacks Audio Video Production industry participants like Sony Group Corporation (SONY - Free Report) , Dolby Laboratories, Inc. (DLB - Free Report) and Sharp Corporation (SHCAY - Free Report) are likely to benefit from investments in cutting-edge technology solutions that drive enhanced communication experiences. Streaming, creator content, gaming and AI-powered tools are reimagining value creation across the industry. Rapid technological advances, such as 4K, 8K and immersive audio formats, are boosting demand for new devices, which bodes well for participants like Dolby. The players also stand to gain as they increase focus on direct-to-customer sales channels
Macroeconomic challenges loom large. Global macroeconomic uncertainty amid escalating trade tensions, tariffs and associated inflationary pressure is likely to keep consumer spending in check. This does not bode well for the participants. A highly promotional environment and stiff competition from importers of comparatively low-priced devices are denting margins. Online accessibility of recording equipment and the availability of distribution channels on the Internet are additional headwinds.
Industry Description
The Zacks Audio Video Production industry comprises television, speaker, video player and camcorder manufacturers. It includes companies that offer gaming consoles, drones and high-end cameras for individuals and industrial markets. These firms provide state-of-the-art audio, imaging and voice technologies that enhance entertainment and communication experiences. Some industry participants develop audio and imaging products, including digital cinema servers and products for film production and entertainment industries. Apart from providing theatrical and television production services for cinema exhibitions, broadcast and home entertainment, these companies work with film studios, content creators, broadcasters and video game designers. Some prominent players are present in the music and image-based software markets worldwide.
4 Trends Shaping the Future of the Audio-Video Production Industry
Technological Advancement to Spur Growth: From rapid technological advances like 4K, 8K and immersive audio formats, the demand for high-resolution visual and audio experiences is a major growth driver. The rise of streaming or OTT platforms is fueling this trend, as consumers and businesses seek to recreate a cinematic atmosphere at home. Gaming is another catalyst, as PC and console gamers now seek enhanced visuals and immersive sound design. The rise of the creator economy is also fueling demand for enhanced cameras and editing tools. Industry players like GoPro are benefiting from this trend, as its cameras are popular among creators. Automotive audio represents another lucrative opportunity as vehicles become more software-driven and experience-focused.
Increasing Demand for Premium Entertainment: The industry performed well despite drastic changes in how media is consumed and distributed. The rise in demand for premium entertainment from record labels, TV producers and advertisers is likely to stoke profitable growth. Strong demand across all regions with a more direct-to-consumer, subscription-centric model bodes well for industry participants.
Macroeconomic Headwinds Likely to Hurt Consumer Demand: The global macroeconomic uncertainty, amid escalating trade tensions and tariffs, and associated inflationary pressures, are likely to keep consumer spending, especially discretionary purchases, in check. While companies keep investing in market share gains and supply-chain resilience, a shortage of critical hardware components due to disruption in the supply chain could hurt revenues in the near term. Fluctuations in commodity pricing for different components are additional concerns. Elevated promotional activity to boost sales amid weak spending is also affecting the performance of these industry participants.
Aggressive Competition: In the United States, smart-connected televisions, microphones and speaker enclosures are the most popular electronic devices among customers. However, U.S.-based manufacturers of audio and video systems face intense competition from importers of comparatively low-priced devices, particularly from China, Vietnam and Mexico. These firms face stiff competition across all end markets, often leading to intense price wars and margin contraction.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Audio Video Production industry is housed within the broader Zacks Consumer Discretionary sector. It currently has a Zacks Industry Rank #35, which places it in the top 15% of more than 243 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Before we present a few audio-video production stocks you may want to consider for your portfolio, let’s look at the industry’s recent stock market performance and valuation picture.
Industry Outperforms the Sector and the S&P 500
The Zacks Audio Video Production industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite in the past year.
The industry has jumped 25.1% over this period compared with the S&P 500’s growth of 18.2%. The broader sector is up 2.2% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
Price-to-earnings is commonly used for valuing audio-video production stocks. The industry has a forward 12-month P/E of 20.86X compared with the S&P 500’s 23.3X. It is above the sector’s forward 12-month P/E of 18.62X.
In the past five years, the industry has traded as high as 23.71X and as low as 11.72X, with a median of 16.63X, as the chart below shows.
Price-to-Earnings Forward Ratio (Past Five Years)
3 Audio Video Production Stocks to Keep an Eye on
Sony Group Corporation: Headquartered in Tokyo, Japan, Sony designs, manufactures and sells several consumer and industrial electronic equipment. The company’s product roster comprises audio and video equipment, televisions, network services, game hardware and software, mobile phones and image sensors. Sony is also active in producing, acquiring and distributing recorded music and managing and licensing lyrics and music for songs.
Strategic shift toward an entertainment-focused business has been Sony’s key growth driver over the years. In recent years, it has increasingly relied on expanding its content offerings across games, music, film and TV. The company has also prioritized the growth of its intellectual property across various business areas, made strategic investments in content, music catalogs and emerging sectors such as anime, and advanced the development and use of innovative technologies to support content creation.
Sony’s G&NS segment is on a steady track, driven by the continued growth of PlayStation 5 in both active users and user spending. PlayStation’s monthly active users rose 3% year over year in September to 119 million and total play time for the quarter also grew 1%. For fiscal 2025, the sales forecast has been revised upward by 3% from the previous view, led by favorable forex movements and solid hardware sales.
The sports business gained momentum with the STATSports buyout. Combining its data with Hawk-Eye and KinaTrax is likely to deliver top-tier sports analytics and drive overall growth. However, business volatility in the second half, along with a slowdown in the imaging market, remains a concern.
At present, SONY carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for its fiscal 2025 bottom line is pegged at $1.20, unchanged in the past 30 days. Shares have gained 26.5% in the past year.
Price and Consensus: SONY
In the second quarter of fiscal 2025, management highlighted “Under the Medium-Term Management Plan,” the company has been making progress in boosting profitability across all businesses. As a result, in the fiscal second quarter, SHCAY noted that operating profit improvement topped initial expectations. Also, its Smart business segment (supports customer DX through data and AI usage) reported nearly double-digit growth year on year in the first half. This was driven by higher demand for office-related services.
With the launch of Unveiled LDK+, its second EV concept model, Sharp Corporation is looking to enter the EV market in fiscal 2027. The company’s equity ratio during the first half improved to 14.6% backed by smooth asset sales. Management revised its fiscal 2025 earnings forecast upward due to better-than-expected fiscal second-quarter numbers for the PC business and improved tariff effects on operating profit.
At present, SHCAY carries a Zacks Rank #2. The Zacks Consensus Estimate for its fiscal 2025 bottom line is pegged at 7 cents, unchanged in the past 30 days. Shares have lost 23.1% in the past year.
Price and Consensus: SHCAY
Dolby continues to see strong engagement across its ecosystem of creators, distributors and device OEMs for its Dolby Atmos and Dolby Vision technologies. In the fiscal quarter of 2025, within the TV segment, leading global manufacturers such as Hisense and TCL were the first to commit to Dolby Vision 2. Wearable adoption also accelerated, with Meta integrating Dolby Atmos and Dolby Vision into its Meta Quest headset and Samsung adding Dolby Atmos to its Galaxy XR.
Dolby is extending its presence in the automotive market, driven by strong demand from OEMs to elevate in-car entertainment quality. During fourth-quarter fiscal 2025, Dolby signed new agreements with major brands such as Maruti Suzuki, India’s largest passenger vehicle company, with more than 40% market share, along with Deepal in China and VinFast in Vietnam. Several manufacturers, including Cadillac, Zeekr, Li Auto, Mahindra and Mercedes, launched new models featuring Dolby technologies.
However, concerns persist due to macroeconomic weakness, ongoing tariff uncertainty and intense competition. For fiscal 2026, it expects full-year revenues to decline by high single digits in CE and PC. The company expects revenues to be in the $1.39-$1.44 billion band.
At present, DLB carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at $4.20, up two cents in the past seven days. Shares have declined 13.5% in the past year.
Price and Consensus: DLB