This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

TiVo Deal Gets Lukewarm Reception

Updated from 2:49 p.m. EST

Investors cheered TiVo (TIVO - Get Report) Tuesday after the company announced a deal with cable giant Comcast (CMSCA), but many analysts remain skeptical.

As part of their seven-year agreement, Comcast will market TiVo's recording service to its 21.5 million cable customers. TiVo will introduce a new version of its service that will work with the digital video recorders, or DVRs, that Comcast is currently offering customers. The companies expect a widespread implementation of the service in mid-to-late 2006.

This is TiVo's second deal with a major distribution partner and comes as its other partner, DirecTV (DTV - Get Report), has begun to introduce a competing service to TiVo's. It also comes as analysts and investors have grown increasingly dubious about TiVo's prospects.

On the news of the deal, TiVo's stock jumped as much as $2.30, or 60%, to $6.13. In recent trading, the company's shares surged $2.67, or 70%, to $6.50 a share.

But some analysts rushed in to pour some cold water on the market's enthusiasm. After the initial run-up, Janco Partners analyst April Horace downgraded TiVo's stock to sell from market perform.

Horace questioned how and to what extent Comcast will promote its TiVo offering when it becomes available, given that Comcast has in the past put more emphasis on promoting other video services. Meanwhile, the deal with Comcast may help end TiVo's already rocky relationship with DirecTV, Horace said. And it may undermine sales of TiVo's more profitable stand-alone service, she said.

"While the announcement between TiVo and Comcast sounds good, we are not as sold on the deal," said Horace in her note. "In light of the risks associated with the unknowns with Comcast ... we feel the shares have more downside risks than any further upside." Horace does not have a position in TiVo shares and Janco has not received fees for investment banking from TiVo in the last year.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs