This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
|Zacks Rank||Definition||Annualized Return|
Zacks Rank Education - Learn more about the Zacks Rank
Zacks Rank Home - All Zacks Rank resources in one place
Zacks Premium - The only way to get access to the Zacks Rank
This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
ROVI remains significantly undervalued, with a forward price-to-earnings (P/E) multiple of just 10.8 and low price-to-book (P/B) multiple of 1.2.
Impressive Q3 for Rovi
In November, Rovi announced third quarter earnings of 35 cents per share, comfortably surpassing the Zacks Consensus Estimate by 52.2%. Revenue of $169.6 million also surpassed expectations.
Following the announcement of the sale of the Rovi Entertainment Store (which was classified as discontinued operations), the company restated its results for the first three quarters of 2012. As per the restatement, Rovi generated revenue of $165.6 million in the third quarter of 2012. Earnings (excluding equity compensation and other one time items) were 56 cents per share in the reported quarter.
Rovi trimmed its revenue guidance for 2012. The company now expects revenue between $645.0 million and $650.0 million, compared to the earlier range of $660.0 million to $670.0 million.
However, the earnings outlook improved. Product rationalization and operational efficiencies are helping cost control and margin expansion at Rovi. The company now expects earnings between $2.05 and $2.10 per share, versus the previously guided range of $1.80 to $1.90 per share.
Earnings Estimates Moving Up
The Zacks Consensus Estimate for 2012 jumped 24% over the last 90 days to $1.44 per share. Specifically, earnings estimates advanced nearly 11% in just the last 7 days following the announcement of the Entertainment Store sale.
Meanwhile, the Zacks Consensus Estimate for fiscal 2013 increased 13% over the last 90 days to $1.56, including a gain of more than 6% in 7 days.
In addition to low P/E and P/B multiples, the stock looks attractive even on a price-to-sales (P/S) basis. Its P/S multiple is 2.5, much lower than the industry average of 4.3. Moreover, Rovis PEG ratio of just 0.86 indicates that the stock is undervalued given the expected growth of 12.5%.
Rovi Corp. provides solutions that guide users to different facets of digital entertainment. Rovis solutions help users to discover digital content related to television, movies, music, books and games. The company also provides Video delivery and advertising solutions. This $1.72 billion company primarily serves consumer electronics manufacturers and different service providers (cable, satellite, telecommunications, mobile and Internet companies). Rovi faces significant competition from Yahoo! (YHOO) and Google (GOOG).
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Then each week he hand-selects the most compelling trades and serves them up to you in a new program called Zacks Confidential.