TiVo: Zacks’ Bear of the Day Play

I have a family member who still has an AOL email address. He used their ISP until the bitter end. I’m pretty sure he was using a 56k modem well after most of us got rid of our landlines. He’s made the move to Netflix but hasn’t yet made the move to streaming. One in the mailbox and one on the way. Not to make fun of him or anything, he’s just an old school kind of guy. I respect that.

The only reason I know that today’sBear of the Day still has a product available is him. He’s still got his TiVo (TIVOFree Report) . When TiVo dropped it was awesome. It was a smart way to record your favorite TV shows and play them back at your leisure, on-demand. It also had a neat feature that would suggest shows you should check out and recorded them for you so you could watch them. Kind of likePandora (PFree Report) and their “Music genome project” only for TV shows. But something happened that derailed TiVo from have a strong hold on TV sets across the world. Streaming on-demand became a much bigger thing.

Analysts have taken note of TiVo’s demise. They have come out and dropped their earnings estimates for the current year and next year to reflect their bearish sentiment. Our Zacks Consensus Estimate for the current year has dropped from $2.10 to $1.23. Next year’s numbers have gone from $2.04 down to $1.39. Those are a couple of major hair-cuts and a big drag on the stock price.

After a fantastic late summer rally that took shares from $15 to over $23, TiVo has struggled to find direction. Chopping sideways after retreating to the high teens, shares have been capped at $22. In early January the stock dipped below its 50-day moving average and in the following weeks had retested the bottom end of the consolidation range that started in September. If shares dip below $18.80 they could freefall to the June lows near $15. What’s also troubling is volume has been drying up along the dip. It appears that there is no bid as shares dip.

We’ve got TiVo as part of the Internet – Services industry that ranks in the Top 49% of our Zacks Industry Rank. If you’re looking for other stock ideas in the same industry you should check out Zacks Rank #1 (Strong Buy) Bridgeline Digital (BLINFree Report) or Zacks Rank #2 (Buy) Health Stream (HTSM).
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