Can TiVo Inc. (TIVO) Keep The Earnings Streak Alive In Q1?

TiVo Inc. (NASDAQ:TIVO) is set to report first quarter fiscal 2017 results on May 31. Last quarter, the company posted a positive earnings surprise of 183.3%. Notably, TiVo has outperformed the Zacks Consensus Estimate thrice in the last four quarters with an average positive surprise of 55.7%.

Let us see how things are shaping up for this announcement.

Factors to Consider

TiVo reported mixed results in the fourth quarter of fiscal 2016, with its bottom line surpassing the Zacks Consensus Estimate and the top line missing the same. Year-over-year revenue comparisons were also favorable. We are optimistic about its prospects owing to its sustained focus on product innovation and subscriber addition. Further, the increased number of distribution deals with cable companies will support TiVo’s expansion plans and strengthen the customer base, which in turn will boost revenues.

We believe that TiVo has significant growth opportunities in Western Europe and Latin America, given its partnerships with local providers. Its strong balance sheet will also allow it to pursue strategic acquisitions and aggressive share buyback programs, thereby boosting near-term growth.

However, increasing competition from the likes of Dish Network (NASDAQ:DISH) and Cablevision Systems Corporation (NYSE:CVC) seems to be the primary headwind in the near term.

Earnings Whispers

Our proven model does not conclusively show that TiVo will beat 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 TiVo is 0.00%. This is because the Most Accurate estimate of 7 cents per share is in line with the Zacks Consensus Estimate.

Zacks Rank: TiVo has a Zacks Rank #1. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are a couple of stocks, which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:

The Cooper Companies Inc. (NYSE:COO) , with an Earnings ESP of +1.04% and a Zacks Rank #2

The Bank of Nova Scotia (TO:BNS) , with an Earnings ESP of +5.51% and a Zacks Rank #2