It has been six months since the Archegos Capital blow-up sank ViacomCBS (NASDAQ:VIAC) stock like a stone. However, the media conglomerate’s results show the business is anything but on the ropes. Still, investors continue to price VIAC stock like it is. Why? The perception that its streaming efforts are “too little, too late.”

Specifically, some see the millions ViacomCBS is putting into new content for Paramount+ and PlutoTV as virtually for naught. The skeptics believe the streaming business will fail to replace falling profits for its “old media” broadcast and cable assets. Or worse, that its streaming services won’t be enough to take on the competition at all.

However, this negative perception may mean opportunity for contrarian investors. When it comes down to it, ViacomCBS is dirt cheap. It trades at a forward price-to-earnings (P/E) ratio of 9.94 times. If it can prove the skeptics wrong, VIAC stock will see a big-time re-rating.

With high possible upside and low downside risk, the verdict here is obvious: buying VIAC now is a move worth making.

VIAC Stock Deserves More Credit for Its Streaming Catalyst

Currently, investors have limited hope that ViacomCBS will deliver on its streaming promises. However, before you go with the crowd, take a look at the details. It’s clear that this company — perceived as an “old media” play at risk of long-term decline — still stands to thrive in the changing media landscape.

First, VIAC’s most recent numbers showed its streaming growth is humming along. Streaming subscriber growth in the quarter ending Jun. 30 came in well above estimates. The company added 6.5 million streaming subscribers in Q2.

Second, the company is just getting warmed up when it comes to adapting to industry changes. As CEO Bob Bakish noted, ViacomCBS is pursuing this transformation from “an extremely strong capital position.”

Flush with cash from asset sales and a capital raise, the company has what it needs in the war chest to take on rivals stateside as well as pursue overseas streaming expansion. The moves it’s making now could start being reflected in results come 2022.

Once that happens, expect this single-digit P/E stock to move up to a valuation it deserves. A move to a 15 times to 20 times P/E (still reasonable compared to other media stocks) would mean a big increase in price. Right now, VIAC stock trades for around $39 per share.

Other Factors Could Limit Downside

The already-low valuation may be enough for some investors to feel safe buying VIAC stock right now. But there are other factors at play that could provide downside protection — even if the stock market continues to experience turbulence.

For one, it’s not just the performance in streaming that could see further improvement. Like I’ve said about VIAC before, the post-pandemic comeback of its Paramount Pictures unit could result in stronger results in the quarters ahead. Box office figures for its recent movie releases, such as PAW Patrol: The Movie, point to this.

Additionally, investors should consider the company’s status as a takeover target. True, takeover talk hasn’t moved beyond the rumor stage. Still, the chances of ViacomCBS getting scooped up in a merger deal remain high. Potential buyers could be rival media conglomerates or big tech companies looking to expand their content offerings.

That’s not to say there isn’t risk here. A major hiccup or misstep with the company’s big bet on streaming would likely pressure shares. However, when comparing potential gains against potential losses? The setup appears to be in your favor here.

Take Advantage and Buy VIAC Stock

Negative perceptions about this company’s streaming prospects continue to keep VIAC stock trading at a bargain price. Of course, this low valuation by itself does not make it a “can’t miss” opportunity. There is a risk ViacomCBS could turn into a value trap. However, there’s much more pointing to the company’s ultimate success.

If positive results come in and investors again appreciate the transformation, this stock could move well above current prices. And at the same time, there’s a lot still pointing to low downside risk.

Coming in with a “B” rating in Portfolio Grader, VIAC stock is a great streaming play that the market has ignored. Consider making it a buy before the crowd takes notice.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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