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What's in the Offing for TiVo (TIVO) This Earnings Season?

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TiVo Corporation TIVO is scheduled to report first-quarter 2018 results on May 10, after the market closes. The question lingering in investors’ minds is whether or not the company will be able to post a positive earnings surprise in the quarter.

Notably, the company has a mixed earnings surprise history. In the trailing four quarters, the company’s results surpassed the Zacks Consensus Estimate twice for as many misses, resulting in an average negative earnings surprise of 0.72%.

What the Zacks Model Unveils?

Our proven model does not conclusively show that TiVo is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It should be noted that stocks with a Zacks Rank #4 or 5 (Sell rated) are best avoided, especially when the company is seeing negative estimate revisions.

TiVo carries a Zacks Rank #5 (Strong Sell), which makes surprise prediction difficult. Furthermore, we noted that the Zacks Consensus Estimate for first-quarter earnings has been revised downward over the past seven days.

Furthermore, the Zacks Consensus Estimate for revenues is pegged at $192.6 million, which represents a 6.4% decline from the year-ago quarter. However, analysts polled by Zacks project 13.3% year-over-year growth in earnings, and reach 34 cents.

TiVo Corporation Price and EPS Surprise

TiVo Corporation Price and EPS Surprise | TiVo Corporation Quote

Factors to Consider

TiVo has been witnessing stiff competition from Internet video providers such as Alphabet’s YouTube, Netflix NFLX, Apple AAPL and Roku, which has been negatively impacting its subscriber base. We believe rising competition to have affected the company’s to-be-reported quarter’s top-line results.

Also, as a result of intensifying competition, TiVo has been increasing its operating expenses to stay ahead, which is likely to have dampened the company’s profitability. Notably, the company’s total cost and expenses flared up approximately 31% to $821.7 million in 2017 from $627.7 million incurred in 2016.

A Stock With a Favorable Combination

Microchip Technology Incorporated MCHP is a company which has the right combination of elements to post an earnings beat. The stock has an Earnings ESP of +0.15% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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