TiVo (TIVO) to Report Q4 Earnings: What's Up for the Stock?

TiVo Corporation TIVO is scheduled to report fourth-quarter 2018 results on Feb 26.

The company’s earnings missed the Zacks Consensus Estimate in all the trailing four reported quarters, the average being 26.7%.

In the last reported quarter, TiVo’s revenues declined 16.8% year over year to $164.7 million and also lagged the Zacks Consensus Estimate of $167 million. Softness of revenues was primarily due to lower uptick of the metric from the Legacy TiVo Time Warp IP deals and a strategic decline in sales of hardware and analog products.

Notably, the Zacks Consensus Estimate for fourth-quarter earnings and revenues is pegged at 28 cents and $173.7 million, respectively. The estimates, when compared with the year-ago quarter’s reported figures, indicate a decline of 12.5% for earnings and 18.9% for revenues.

Let’s see, how things are shaping up for the upcoming announcement.

Factors to Consider

TiVo is hurt by the loss of four settlement contracts for the company’s Legacy TiVo Time Warp IP, which ended in June 2018. The third quarter of 2018 marked the last period to realize solid revenues from this deal. Therefore, its loss is inducing a massive amount of revenue deficit for the company.

Besides, a severe competition from Google TV, Roku and Apple TV is eroding its subscriber base. Further, the company anticipates an additional increase in IP litigation spends on account of investment in the ongoing Comcast CMCSA litigation.

However, the company estimates new customer licensing and renewals to aid sequential growth in revenues. Opportunities to thrive in the international markets, content providers and new media are a positive for its IP licensing business.

TiVo is also banking on Experience 4, which is gaining a solid momentum. The launch of the TiVo BOLT OTA, which received a flurry of favorable reviews, is an upside.

The company’s focus lies on its ongoing strategic review and its chances to split up its intellectual property and licensing business as well as its products and services business. This is supposed to be discussed on the upcoming earnings call.

TiVo Corporation Price and EPS Surprise

TiVo Corporation Price and EPS Surprise | TiVo Corporation Quote

What Our Model Says

Our quantitative Zacks model conclusively suggests that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has significant chances of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TiVo currently has a Zacks Rank #3, which increases the predictive power of ESP, but an Earnings ESP of 0.00% in its combination, makes surprise prediction difficult for the stock this earnings season.

Stocks to Consider

Workday, Inc. WDAY has an Earnings ESP of +0.64% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Square, Inc. SQ has an Earnings ESP of +5.95% and a Zacks Rank of 2.

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