Market Overview

TiVo Earnings Preview: Higher Revenues Expected

TiVo (NASDAQ: TIVO) is scheduled to report fiscal third-quarter 2012 results today, November 22, after the closing bell. The DVR pioneer continues to try and stem the tide of subscriber losses in this era of the cloud and streaming video. Investors will no doubt be hoping that analysts have overestimated the net loss per share again as they have in the previous two periods, and also that the year-over-year revenue growth in the second quarter was not a one-time thing.

The consensus forecast calls for TiVo to report a loss of $0.23 per share this time, compared to a loss of $0.18 in the same quarter of last year. That EPS estimate is unchanged over the past 60 days. Note that TiVo reported narrower-than-expected net losses in five of the past seven quarters.

However, analysts also expect the company to report that revenues increased 22.2% from a year ago to $50.5 million. Looking ahead to the current quarter, revenues are anticipated to be 24.0% higher year over year. And for the full year, the forecast so far calls for revenues to be up 13.3%, with per-share earnings of $0.54, largely due to strong earnings results in the first quarter.

The Company

The company offers subscription-based services that provide consumers with a way to record, watch and control live television, as well as to receive videos, pictures and movies from cable, broadcast and broadband sources. It also provides a platform for advertising and audience research measurement services. TiVo had 1.9 million subscribers as of July. The company was founded in 1997 and its market cap is now $1.1 billion.

During the three months that ended in October, the company announced that its iPad and iPhone apps soon would more closely integrate with Facebook. The company authorized $100 million in share buybacks and it added a Harvard professor to its board.

Performance

Per-share earnings are expected to grow about 40% over the next five years. TiVo's PEG ratio is lower than the industry average, and its return on equity is a healthy 24.8%. Though the short interest is a hefty 10.9% of the float, seven of 11 analysts surveyed rate the stock a Buy or Strong Buy. Their mean price target of $14.45 per share is more than 33% higher than the current share price.

The share price has pulled back about 6% in the past week but is more than 28% higher than three months ago and up almost 16% year to date. The share price is still above the 200-day moving average. Over the past six months, the stock has outperformed AT&T (NYSE: T) and Netflix (NASDAQ: NFLX), as well as the broader markets.

Action Items:

Bullish: Investors interested in exchange traded funds invested in TiVo might want to consider the following trades:

  • PowerShares Dynamic Technology (NYSE: PTF) is about 14% higher than a recent 52-week low.
  • iShares S&P North America Tech-Software (NYSE: IGV) is more than 16% higher than three months ago.
  • iShares Morningstar Small Growth Index (NYSE: JKK) is more than 15% higher than a recent 52-week low.

Bearish: Traders may want to consider these alternative positions:

  • Dish Network (NASDAQ: DISH) is more than 25% higher than three months ago.
  • DirecTV (NASDAQ: DTV) is more than 11% higher than three months ago.

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Posted-In: analyst forecasts AT&T DIRECTV Dish Network earnings previews ETFs Exchange Traded Funds Netflix tech stocks tivoEarnings Long Ideas Short Ideas Previews Trading Ideas

 

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