The Zacks Audio Video Production industry participants like Dolby Laboratories, Inc. (DLB Quick QuoteDLB - Free Report) , Sonos Inc. (SONO Quick QuoteSONO - Free Report) and LiveOne, Inc. (LVO Quick QuoteLVO - Free Report) are likely to benefit from investments in cutting-edge technology solutions that drive enhanced communication experiences. Streaming, creator content, gaming, spatial audio and AI-powered tools are reimagining value creation across the industry. Rapid technological advances, such as 4K, 8K and immersive audio formats, are boosting the 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.

However, the industry faces some headwinds. Hardware demand remains cyclical and sensitive to consumer spending. 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 the 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 is 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 the 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 of #16, placing it in the top 7% of more than 244 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 Lags the Sector & the S&P 500

The Zacks Audio Video Production industry lags the broader Zacks Consumer Discretionary sector and the S&P 500 composite in the past year.

The industry has lost 13.8% over this period against the S&P 500’s 21.3% return. The broader sector has edged down 3% over the same timeframe.

1-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 16.94X compared with the S&P 500’s 21.57X. It is below the sector’s forward 12-month P/E of 17.22X.

In the past five years, the industry has traded as high as 23.92X and as low as 16.94X, with a median of 21.24X, as the chart below shows.

Price-to-Earnings Forward Ratio (Past Five Years)

 

3 Audio Video Production Stocks to Consider

Sonos: Headquartered in Santa Barbara, CA, Sonos operates as a consumer electronics company that is primarily involved in the manufacturing of speakers with immersive sound experiences.

Product innovation is reaccelerating after a deliberate pause, with launches in the pipeline for the second half of fiscal 2026. Following the launch of Amp Multi, the company launched Sonos Play & Era 100 SL speakers last week. With this launch, the company is reinforcing its strategy of building a sound system that grows with users over time rather than forcing them to replace devices with each upgrade. The Sonos Play is positioned as the brand’s most versatile speaker to date. It combines the performance expected from a home speaker with the portability needed for on-the-go listening. 

The Era 100 SL is a mic-free version of the popular Era 100, designed for users who prefer a more private listening experience without requiring a voice assistant functionality. By removing microphones and streamlining certain features, Sonos has created a more affordable gateway into its ecosystem.

Sonos is also refining its go-to-market strategy while expanding geographically to tap underpenetrated international markets. Sonos currently holds about 6% share of the $24-billion premium audio market, underscoring significant headroom for share gains.

Sonos expects second-quarter revenues between $250 million and $280 million, indicating a 4% year-over-year decline to an 8% increase, with a 2% rise at the mid-point. 

At present, SONO sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at $1.20, unchanged in the past 30 days. The company’s shares have gained 16.8% in the past year.

Price & Consensus: SONO

Dolby: 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. The company’s Dolby Vision 2 for TVs builds on Dolby Vision and is designed to meet evolving viewer expectations while enhancing movies, sports and gaming with more vivid pictures and brighter colors across mainstream and premium TVs. Peacock and Canal+ announced support as early launch partners, and TP Vision (Philips), Hisense and TCL introduced upcoming models supporting Dolby Vision 2. Dolby expects the first Dolby Vision 2 TVs to be available by the end of the year. 

Dolby is extending its presence in the automotive market, driven by strong demand from OEMs to elevate in-car entertainment quality. Dolby stated that it now has partnerships with more than 35 OEMs, up from 20 a year ago.  It also announced collaboration with Qualcomm to integrate Dolby Atmos and Dolby Vision into the latter’s Gen 5 Snapdragon Automotive platform. Integrations like these are aimed at expanding its footprint into the auto ecosystem.

For fiscal 2026, the company expects revenues of $1.4-$1.45 billion compared with the prior mentioned $1.39-$1.44 billion. The company reported revenues of $1.35 billion in fiscal 2025. Licensing revenues are projected to be $1.295-$1.345 billion compared with the previously stated $1.285 billion to $1.335 billion.

With Dolby Atmos, Dolby Vision and imaging patents growing at roughly 15% and accounting for nearly half of its licensing revenues, the company expects foundational revenues to decline slightly overall.

At present, DLB carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at $4.31, unchanged in the past seven days. Shares have declined 25.5% in the past year.

Price & Consensus: DLB

LiveOne: Headquartered in Los Angeles, CA, LiveOne provides a platform for live stream and on-demand audio, video, and podcast/vodcast content in music, comedy, and pop culture and is the owner of LiveXLive, Slacker Radio, PodcastOne and React Presents, among others. 

LiveOne is focused on aggressively cutting down costs (declining 52% year over year in the third quarter of fiscal 2026) and reducing debt to strengthen its balance sheet. It is leveraging AI to streamline its workforce. 

The company is strategically focusing on expanding its B2B deals, having established significant new agreements and identifying potential partnerships in the pipeline. On the last reported quarter’s earnings call, LVO highlighted that the pipeline was up 30% in the last 4 months, with more than 100 active enterprise opportunities (ranging from $1 billion to $1 trillion companies). Strengthening partnerships with platforms like Amazon, Apple and Tesla, and the expected launch of three Fortune 500 partnerships, bode well.  

LVO is also targeting conversion of more than 1 million free and ad-supported users into paid tiers, while leveraging its 65 million-user database to launch proprietary products.

Management expects fiscal 2027 revenues of $85-$95 million, with $8-$10 million in adjusted EBITDA.

At present, LVO carries a Zacks Rank #2. The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at a loss of $1.54, unchanged in the past 30 days. Shares have fallen 25.7% in the past year.

Price & Consensus: LVO