Comcast Corporation (CMCSA), DirecTV (DTV): Should You Love or Hate TiVo Inc. (TIVO)?

Potential for TiVo

Despite all the tailwinds, a glimmer of hope exists for TiVo. The company has tapped the smartphone and tablet market with new products and apps for Android-based systems and iOS. Users can search, browse, schedule, and share shows, without interrupting what they’re watching.

TiVo is also forming distribution agreements in different markets overseas. TiVo is looking to expand in the United Kingdom, Australia, Mexico, New Zealand, Spain, Sweden, and Taiwan. In the last quarter, Virgin Media added 172,000 TiVo subscribers (total now 1.5 million), and Spain’s ONO added 166,000 subscribers, which was a 68% increase over three months earlier.

All of this might sounds promising, and it has the potential to lead to stock appreciation in the near future. However, it’s only a matter of time before the rest of the world catches up with more advanced technologies.

TiVo acquired TRA Global (advertising efficiency company) last year, which is now called TiVo Research & Analytics. TiVo is looking to grow in this area, and it points out that it’s currently capable of measuring television viewership and commercials more accurately than Nielsen Media — on a second-by-second basis, as opposed to Nielsen’s minute-by-minute data. Those specific insights could make TiVo more attractive to advertisers.

If you’re long and looking for more good news, TiVo Inc. (NASDAQ:TIVO) plans on buying back $200 million worth of shares over the next two years. With close to $571 million in cash, TiVo can afford the buyback, but it’s likely just a short-term solution for buoying the stock price.

Conclusion

TiVo is falling behind on the technological front, and since the majority of its revenue comes from its DVR service, this is bad news. Overseas expansion presents near to medium-term potential, but it’s not likely to be sustainable without significant innovation. And any innovations would come at a steep cost. Management seems to be concerned about future prospects and sustainable profitability. Based on that fact alone, you should consider staying away from TiVo Inc. (NASDAQ:TIVO).

 The article Should You Love or Hate TiVo? originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends DirecTV. Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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