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Will TiVo Earnings Beat? Brean's Excited, And Sees Value In Shares

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In a report published Friday, Brean Capital analysts reiterated their Buy rating and price target of $14 on TiVo Inc. (NASDAQ: TIVO). The analysts believe that the stock holds value even in the absence of "clear catalysts for upside."

The analysts expect the company to report strong results for F1Q16, a trend that is likely to continue through F2016, despite the impact of customer consolidation and higher competition on TiVo's terminal value. The analysts believe that the company can address its terminal value by diversifying into new horizontal technology integration models.

"We are trimming our F1Q16 and F2016 net add forecast modestly, but we continue to think TiVo will add over 250,000 new subs in F1Q16, and over 1 million new subs in F2016, and we note that TiVo has opened up new means to grow its sub base in F2017 with expansion of licensing deals in North America and Europe," the Brean Capital report said.

In addition, the analysts expect the company to witness double-digit revenue and adjusted EBITDA growth through F2016. Aggressive buybacks are also expected to lead to a meaningful increase in non-GAAP EPS in F2016. All this is likely to lead to upside to the current share price.

The company has also been working on new ways to grow its subscriber base in F2017, such as the expansion of its agreement with Virgin Media, Inc. (NASDAQ: VMED). Virgin Media announced plans to expand its UK network by 4 million homes, of which the analysts expect TiVo to be able to achieve a penetration of 30-40 percent.

TiVo is also likely to benefit from similar video service expansion across Vodafone Group Plc (NASDAQ: VOD) ONO and Orange networks in Spain. In addition, TiVo also intends to initiate deployment in partnership with Frontier Communications Corp. (NASDAQ: FTR) in the US this summer.

Latest Ratings for TIVO

DateFirmActionFromTo
Jun 2016MKM PartnersDowngradesBuyNeutral
Dec 2015BarclaysMaintainsEqual-Weight
Mar 2015MacquarieInitiates Coverage onOutperform

View More Analyst Ratings for TIVO
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Posted-In: Brean CapitalAnalyst Color Reiteration Analyst Ratings

 

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