Rovi Corporation Expected To Outperform In 2015

In a report published Tuesday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $31.00 price target on Rovi Corporation ROVI. In the report, Brean Capital noted, "After a multi-year reset, we believe Rovi has finally gotten its house in order. The horrible Sonic deal is finally unwound, legacy revenues are now diminished to the point where they will not weigh on 2015 comps, and we think Rovi has come up with a solid product strategy in its cloud services initiative. As a result, we expect shares of ROVI to outperform in 2015. The big lever will be increased investor confidence in Rovi's ability to renew major Service Provider deals in 2016, which should lead to double-digit revenue growth and even greater increases in non-GAAP EPS in 2016 and 2017." The report continued, "In the meantime, the little lever will be greater transparency and likely upside to what we believe is a conservative 2015 guide, from steadily increasing ASP for Rovi's core IP licensing business and increased traction with new cloud-based services and products. Together we believe this will translate to upside to estimates and multiple expansion leading to outperformance for the shares in 2015. As a result, we reiterate our Buy rating and $31 target price." Rovi Corporation closed on Friday at $24.21.