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Are Investors Undervaluing TiVo (TIVO) Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is TiVo (TIVO). TIVO is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.71. This compares to its industry's average Forward P/E of 25.11. Over the last 12 months, TIVO's Forward P/E has been as high as 11.81 and as low as 6.91, with a median of 9.15.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. TIVO has a P/S ratio of 1.49. This compares to its industry's average P/S of 2.41.

Finally, our model also underscores that TIVO has a P/CF ratio of 12.67. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. TIVO's P/CF compares to its industry's average P/CF of 19.78. TIVO's P/CF has been as high as 14.48 and as low as 6.92, with a median of 11.24, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that TiVo is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TIVO feels like a great value stock at the moment.


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