B Riley Likes TiVo After Signing 2 Licensing Agreements This Week

TiVo Corp TIVO received a bullish initiation after announcing the signing of two licensing agreements this week.

The Analyst And Rating

B Riley analyst Eric Wold reiterated a Buy rating and $18 price target on TiVo.

The Thesis

Wold is revisiting TiVo given the surprising lack of activity in shares after the company signed licensing agreements with LG Electronics and Shaw Communications Inc SJR this week.

“In our opinion, the relatively benign 3.2% move in TiVo shares this week is a fairly clear indication that investors are now almost entirely focused on the ongoing licensing dispute and litigation with Comcast Corporation CMCSA with almost a complete disregard for any other improvements in the company’s baseline licensing operations,” Wold wrote in a note.

The analyst said although TiVo did not increase second quarter or full-year 2019 guidance following the announcement, he views it solely as a function of the timing of the announcements as opposed to the significance of the announcements.

“Given that LG Electronics has been out of license for roughly 18 months prior to this licensing agreement being signed, we would expect 2019 results to essentially benefit from two years’ worth of license revenue. And we would also expect a positive benefit to 2019 expectations from the Shaw Communications agreement,” he added.

Price Action

TiVo shares are up 0.48%, trading at $7.38 late Friday.

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