TiVo Rides High On Back-to-Back Deals With Minerva And Izzi

TiVo Corporation (NASDAQ:TIVO) recently announced at the CES 2019 that it has signed a new metadata deal with Minerva Networks, wherein it will provide the metadata for Minerva YourTV Now, globally. Additionally, a multi-year intellectual property (IP) license renewal agreement has been signed between the companies.

The new global metadata deal will enable Minerva to eliminate dependence on multiple metadata vendors and consolidate its metadata across its Minerva 10 platform. Minerva will be able to quickly access trending content and market the right content and enhance search results, among others, by using TiVo’s metadata platform.

Further, TiVo also announced a multi-year license deal with Mexican cable operator izzi Telecom for metadata for izzi Telecom video service, which will include a wider deployment of TiVo’s Passport Guide for set-top boxes. This will enhance viewing experience of subscribers, who will be able to find and watch TV content more easily.

What it Holds for Tivo

TiVo’s revenues from the Licensing, services and software division dropped 14.5% year over year in the last reported quarter. IP Licensing revenues declined approximately 25.7% due to soft revenues from out-of-license settlements. Under the IP Licensing segment, revenues of the U.S. Pay TV Providers declined 30%.

These apart, low revenues from the Legacy TiVo Time Warp IP deals led to a decline in the company’s third-quarter revenues.

The company is therefore banking on new agreements to turn around its fortunes. Continued license agreements and renewals bode well for it.

In September last year, TiVo announced a multi-year license with Optiva Media to provide entertainment metadata, including TV schedules to the latter.

Further, in November, TiVo announced the renewal of Foxtel's license to its Search and Recommendation Services. This was followed by its multi-year patent license agreement in December with Samsung (KS:005930) for the use of Rovi’s video discovery patents and technologies across Samsung’s smartphone and tablet devices.

We believe that such licensing agreements would be incrementally beneficial for the company. Additionally, the deals would provide the necessary competitive edge over its peers in the emerging market of online video streaming.

Zacks Rank & Stocks to Consider

TiVo currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Computer and Technology sector are Synopsys, Inc. (NASDAQ:SNPS) , Infineon Technologies AG (OTC:IFNNY) and Marvell Technology Group Ltd. (NASDAQ:MRVL) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Synopsys, Infineon and Marvell is projected to be 10%, 8.62% and 9.38%, respectively.

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