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Brean Capital Is Looking For Recognition Of TiVo's Strong Value Proposition

Dwight Einhorn

In a report published Thursday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $16.00 price target on TiVo (NASDAQ: TIVO).

In the report, Brean Capital noted, “Looking for recognition of TiVo's strong value proposition. TiVo is expected to report another quarter of solid subscriber growth with F2Q15 results next week, which with the company's licensing annuity, should translate to positive adjusted-EBITDA. We expect current trends to continue through the remainder of fiscal 2015, as TiVo's value proposition is resonating with its core customer base who are facing an increasingly challenging competitive dynamic and accelerating investment in their service profile.

"We also see the potential for TiVo to grow a solid business in cloud-based services around its recent acquisition of Digitalsmiths. However, the market is waiting for, and TiVo will ultimately have to deliver, new distribution deals with larger MSO to generate upside to the company's current valuation. During the quarter, industry sources pointed to the possibility of an announcement with a large European MSO, which we believe would drive upside to current share prices. As a result, we reiterate our Buy rating and $16 target price.”

TiVo closed on Wednesday at $13.55.

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