Rodman & Renshaw upgraded Tivo (TIVO) to market outperform from market perform.
Analyst Daniel Ernst says he expects Tivo to report in-line fourth quarter results on March 6, and he sees cash flow upside during fiscal 2004 (Jan). He says the company, a subscription-based television service that lets viewers pause, rewind and play back live or recorded TV broadcasts, performed well at DirecTV and Amazon.com despite a generally weak holiday selling season. He now expects Tivo to meet his 125,000 net subscriber additions target.
Additionally, Ernst notes several new products continue to position the company at the top of the digital media marketplace, and he thinks the introduction of home media management software is likely to generate high-margin revenue -- representing upside to his model. He raised the $10.4 million fiscal 2004 EBITDA estimate to $15 million, and set a $7 target.