Piper Jaffray Downgrades TiVo

Analyst Gene Munster cites the digital video recording service company's continued growth rate decline in subscriptions and reliance on cable and satellite operators

Piper Jaffray downgrades digital video recording service company TiVo Inc. (TIVO ) to underperform from marketperform.

Analyst Gene Munster cites a continued decline in the growth rate of TiVo-owned subscriptions, increasing future reliance on cable/satellite operators, and 2006 sensitivity analysis of U.S. digital cable/satellite penetration, valuation, and length of time required to create viable ad-based business model.

He notes that the shares were up 54% in the last 10 days. While first-quarter results exceeded estimates, the stock move was unwarranted.

Munster says while some believe there are prospects for an ad-based business model, he doesn't anticipate a material benefit within the next two years.

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