MKM Partners Reiterates on TiVo Following In-Line Quarter Report
In a report published Wednesday, MKM Partners analyst Rob Sanderson reiterated a Buy rating and $15.00 price target on TiVo (NASDAQ: TIVO).
In the report, MKM Partners noted, “TIVO reported an in-line quarter on key financial metrics with upside to MSO subscriber additions, the key metric. Guidance was in the range, with EBITDA light on a planned increase of $4-$5mn in marketing spending to promote the new Roamio product into the Holidays. The change in accounting treatment for Virgin Media will begin to impact Q4, and this will be accretive to EBITDA but for less than half the quarter. We had modeled this benefit to begin in Q3 with the full impact in Q4. This will push out one-quarter, which shifts this step-up in EBITDA contribution into 1QFY15 in our model. We still don't think the street is properly modeling this. While the cable industry in general still seems to be in a state of inertia regarding advanced television, we see a significant upside case for the company. With over $11 in cash and guaranteed payments, we think the implied value of the core business (less than $2.25 per share) is attractive for this growth potential.”
TiVo closed on Tuesday at $13.24.
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