How Will TiVo (TIVO) Stock React To Filing Of $200 Million In Senior Notes?

NEW YORK (TheStreet) -- TiVo  (TIVO) announced it will offer $200 million in senior notes due 2021, in a private offering to institutional buyers in after-hours trading today.

The company will use net proceeds, including the share repurchases of 15.47 million shares, to fund the immediate repurchase of $50 million of common stock as well as to fund the cost of convertible note hedge transactions.

Shares of TiVo are up 0.87% to $13.56 in after-hours trading today.

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Separately, TheStreet Ratings team rates TIVO INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TIVO INC (TIVO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 11.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for TIVO INC is rather high; currently it is at 65.66%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TIVO's net profit margin of 8.32% significantly trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.49 is very high and demonstrates very strong liquidity.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • TIVO INC 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TIVO INC turned its bottom line around by earning $1.98 versus -$0.09 in the prior year. For the next year, the market is expecting a contraction of 86.4% in earnings ($0.27 versus $1.98).
  • You can view the full analysis from the report here: TIVO Ratings Report

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