NEW YORK (TheStreet) -- Rovi Corp. (ROVI) stock is rising 2.14% to $16.20 in pre-market trading on Monday after the entertainment technology company renewed its patent license agreement with Sony Corp. (SNE).
The multi-year agreement gives Sony a license to use Rovi's entertainment discovery patent portfolio for its consumer electronics devices worldwide, the company said in a statement today.
Based in Santa Clara, CA, Rovi has more than 5,000 patents issued or pending worldwide.
The patents cover areas such as interactive program guides, search and recommendations, and multi-screen experiences that power personalized entertainment, Rovi said.
Sony stock closed at $24.70 on Thursday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ROVI CORP as a Sell with a ratings score of D. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 162.5% when compared to the same quarter one year ago, falling from -$7.03 million to -$18.46 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, ROVI CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.04%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 214.28% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- ROVI CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ROVI CORP swung to a loss, reporting -$0.14 versus $0.21 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus -$0.14).
- The gross profit margin for ROVI CORP is currently very high, coming in at 78.58%. Regardless of ROVI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ROVI's net profit margin of -16.06% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: ROVI