Jefferies On TiVo: 'More Subs, More Deals, More Innovation, Less Opex, and Fewer Shares'

In a report published Wednesday, Jefferies analysts maintained a Buy rating on

, with a price target of $18, after the company reported another robust quarter. The company reported 7 percent growth in Service & Tech revenue to $92MM, in-line with expectations. Adjusted EBITDA came in at $29MM, representing 25% y/y growth, and beating expectations. While net income, at $8MM, was in line, EPS came in at $0.08, marginally ahead of expectations. "Management took a bullish tone around the research business, which looks well positioned against rapid growth in programmatic TV ad spending," the analysts said. Total TiVo subs jumped 27 percent y/y to 5.8MM. The MSO business generated a 34 percent increase in subs to 4.8MM, and service revenue growth of 41 percent, with existing relationships scaling up and new distribution partnerships forming. "Management continues to see upside in North America, which represented 48% of total MSO sub adds in 1Q, the highest ever," the analysts added. For the first time in 8 years, TiVo's retail business reported positive net adds in FY1Q, driven partly by new and innovative products. Moreover, TiVo repurchased shares worth $20MM during the quarter, after having spent $117MM to repurchase 9.7MM shares in the previous quarter. TiVo acquired Cubiware for about $27.5MM in cash and a $20.5MM earnout. The acquisition is expected to be accretive to full-year adjusted EBITDA in FY16.