TiVo’s (TIVO) third-quarter results fell substantially from the prior-year quarter and missed the Zacks Consensus Estimate. Despite an improving spending environment, the company provided lower-than-expected guidance.
TiVo faces increasing competition from cable and satellite providers, which is eroding its subscriber base and leading to market share losses. Aggravating the situation is the competitive offerings from Comcast and Cox. Further, TiVo’s long-standing patent infringement dispute with Dish Network remains an overhang.
With falling margins, we do not expect the company to become profitable in the next several quarters. However, the company has signed a number of agreements, which will be beneficial in the longer term. But with negative earnings and falling revenues, we downgrade the stock to Underperform with a price target of $8.50.Zacks Investment Research
