Piper Jaffray Downgrades TiVo
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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