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Is TiVo (TIVO) Stock Undervalued Right Now?

Zacks Equity Research

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

TiVo (TIVO) is a stock many investors are watching right now. TIVO is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.81 right now. For comparison, its industry sports an average P/E of 24.20. Over the last 12 months, TIVO's Forward P/E has been as high as 11.83 and as low as 6.91, with a median of 9.22.

Investors should also note that TIVO holds a PEG ratio of 0.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TIVO's PEG compares to its industry's average PEG of 1.36.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. TIVO has a P/S ratio of 1.41. This compares to its industry's average P/S of 2.41.

Finally, investors should note that TIVO has a P/CF ratio of 11.48. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 19.54. Over the past year, TIVO's P/CF has been as high as 14.48 and as low as 6.92, with a median of 11.06.

These are just a handful of the figures considered in TiVo's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that TIVO is an impressive value stock right now.


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