Sept 4 JP Morgan Securities raised TiVo Inc
to "overweight," citing strong subscriber growth and
expectations of a favorable outcome for its patent dispute with
Verizon Communications Inc next month.
TiVo's shares rose 5 percent in morning trade on Tuesday on
TiVo, which sells set-top boxes and licenses its digital
video recording (DVR) technology to cable operators, reported
better-than-expected second-quarter results last week on higher
sales of its video recorders.
The number of TiVo subscriptions across the globe grew 41
percent year-over-year during the quarter, led by growth at
Virgin Media Inc.
The company is adding customers like cable operators Com Hem
in Scandinavia and GCI in Alaska, and is poised for higher
adoption for its technology at ONO in Spain, Charter and ComCast
Corp, analyst Paul Coster wrote in a note, raising his
rating on TiVo stock from "neutral."
TiVo's advanced TV solutions, which integrate broadcast
programming, video on demand and internet video with interactive
ad content, appeal to smaller cable operators that need to
defend against encroachment by new home entertainment rivals
like Google and Apple Inc, Coster said.
TiVo owns hundreds of patents and regularly sues other
companies. A good chunk of its revenue comes from litigation
It had earlier this year reached a patent-related settlement
with Verizon's rival AT&T Inc under which the mobile service
provider agreed to pay TiVo a minimum of $215 million and
monthly licensing fees.
The trial in the Verizon case is scheduled to begin on Oct.
"We believe a Verizon settlement in excess of $200 million
is possible but if this case goes to trial potential outcomes
range from zero through multiples of $200 million," he said.
Billionaire Charlie Ergen-led Dish Network Corp and
EchoStar Corp also agreed to pay TiVo $500 million to
settle a patent dispute in May.
TiVo also licenses its digital video recording technology to
DirecTV, RCN and Suddenlink.