Zacks Investment Research upgraded shares of TiVo Inc. (TIVO) from NEUTRAL to OUTPERFORM on February 19, 2013, with a target price of $16.00.
TiVo reported better-than-expected third quarter 2013 results based on the litigation proceeds from the Verizon settlement and improved subscriber base. Management provided positive guidance for the fourth quarter of 2013. However, the remaining pending patent litigation issues, rising R&D costs, and increasing competition are expected to impact TiVo's profitability in the short term. Nevertheless, we remain optimistic about the company's growth potential owing to new partnerships, product launches and international expansion opportunities. Moreover, the successful monetization of patents also ensures a recurring revenue stream for the company over the long term. These compel us to upgrade our recommendation from Neutral to Outperform. We set a price target of $16.00.
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