Rovi Corp.

Rovi Corp. (ROVI) is leveraging its progressive technology to score big revenue and share price gains. The company's stock price is up more than 200% in the last 6 months on strong earnings and bullish projections.

Company Description

Rovi Corporation provides various solutions for businesses to protect, enable and distribute their digital goods to consumers in the United States and Internationally. The company was created in 1983, changed its name from Macrovision in July of 2009 and has a market cap of $2.56 billion.

Shares of ROVI have been on a tear for most of the year, more than tripling in price after bottoming out in January. The company's strong first-quarter results, reported on May 6, provided more optimism.

First-Quarter Results

Sales were up big from last year, climbing to $11.2 million from $30.3 million. On the income side, the company reported a loss of $41.5 million due to one-time charges related to discontinued operations and amortizations related to an acquisition.

When stripping out the one-time items, earnings per share were 31 cents per share, 13 cents ahead of the consensus.

Guidance Raised

Curing the earnings call, Rovi raised the low-end of its 2009 revenue and earnings guidance, with revenue up from $480 million to $490 million and earnings expected to fall between $1.25 and $1.45 per share.

Valuation

Based upon this earnings projection, this stock has a P/E multiple of 20X, a premium to the overall market. While shares are a bit pricey right now, analysts are bullish on the company's longer term earnings potential, with the next-year estimate projecting 33% growth.

The Chart

As previously mentioned, shares of ROVI have had a great year, bottoming out just above $8 in January and recently topping off above $25. Take a look at the nice run below.

Read the full analyst report on ROVI