TiVo Corporation (TIVO - Free Report) is set to report second-quarter 2017 results on Aug 3. Last quarter, the company posted a positive earnings surprise of 57.1%. Let us see how things are shaping up prior to this announcement.
Factors at Play
TiVo reported strong results for first-quarter 2017, wherein both the top line and bottom line came ahead of our expectations. This can primarily be attributed to the inclusion of the recently merged TiVo’s business, new licensing agreements, as well as the introduction of innovative products.
Prior to the acquisition, Rovi provided a set of solutions that allowed businesses to protect, enable and distribute digital goods to consumers, aiding them discover and manage digital media across multiple channels. Meanwhile, TiVo pioneered a brand new category of products by developing the first commercially available digital video recorder. However, over the years, the company expanded capabilities beyond hardware sales and patent licensing to online subscription services.
The merger has brought together two leading players in the media entertainment industry, with complementary products and services as well as a number of patented technologies. The two companies have been witnessing stiff competition from Internet video providers such as Alphabet’s YouTube, Netflix Inc. (NFLX - Free Report) , Apple and Roku. Notably, these two companies were arch rivals and their merger will prove to be mutually beneficial.
The new TiVo is the global leader in entertainment technology and audience insights. The company has a diverse product portfolio that ranges from interactive program guide to DVR. The combined company has emerged as the world’s leading media and entertainment provider to deliver the ultimate entertainment experience.
Apart from this, the combined company has over 6,000 issued and pending patents, which offer it a competitive advantage over other media and tech giants.
Nonetheless, the actual synergies from the merger will take some time to reflect in the performance and much depends on how successfully it integrates the legacy business of TiVo.
TiVo Corporation Price and EPS Surprise
Our proven model does not conclusively show that TiVowill beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for TiVois 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 10 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: TiVocarries a Zacks Rank #3, which when combined with an ESP of 0.00%, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some other companies you may consider as our proven model shows these have the right combination of elements to post an earnings beat this quarter:
CA Inc. (CA - Free Report) , carries a Zacks Rank #3 and has an Earnings ESP of +4.00%.
Symantec Corporation (SYMC - Free Report) , with an Earnings ESP of +16.67%, carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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