Intrinsic value of TiVo - TIVO

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$16.40

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$16.40

 
Intrinsic value

$73.97

 
Up/down potential

+351%

 
Rating

str. buy

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TIVO stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  23.38
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  649
  1,038
  1,604
  2,399
  3,481
  4,912
  6,752
  9,063
  11,901
  15,313
  19,342
  24,019
  29,365
  35,395
  42,113
  49,517
  57,600
  66,351
  75,754
  85,796
  96,460
  107,733
  119,603
  132,061
  145,101
  158,722
  172,925
  187,717
  203,106
  219,108
  235,739
Variable operating expenses, $m
 
  794
  1,127
  1,596
  2,234
  3,078
  4,164
  5,527
  7,200
  9,213
  11,589
  14,166
  17,320
  20,876
  24,838
  29,205
  33,973
  39,134
  44,680
  50,602
  56,892
  63,541
  70,542
  77,890
  85,581
  93,614
  101,992
  110,715
  119,792
  129,230
  139,039
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  628
  794
  1,127
  1,596
  2,234
  3,078
  4,164
  5,527
  7,200
  9,213
  11,589
  14,166
  17,320
  20,876
  24,838
  29,205
  33,973
  39,134
  44,680
  50,602
  56,892
  63,541
  70,542
  77,890
  85,581
  93,614
  101,992
  110,715
  119,792
  129,230
  139,039
Operating income, $m
  21
  245
  477
  803
  1,247
  1,833
  2,589
  3,537
  4,701
  6,100
  7,753
  9,852
  12,045
  14,519
  17,275
  20,312
  23,628
  27,217
  31,074
  35,193
  39,568
  44,192
  49,061
  54,171
  59,520
  65,108
  70,934
  77,001
  83,314
  89,878
  96,700
EBITDA, $m
  145
  483
  746
  1,116
  1,620
  2,285
  3,141
  4,217
  5,537
  7,124
  8,998
  11,174
  13,661
  16,467
  19,592
  23,037
  26,797
  30,868
  35,243
  39,914
  44,876
  50,120
  55,642
  61,438
  67,505
  73,842
  80,449
  87,331
  94,490
  101,935
  109,672
Interest expense (income), $m
  30
  34
  63
  106
  166
  248
  356
  495
  669
  883
  1,141
  1,445
  1,798
  2,202
  2,657
  3,165
  3,724
  4,334
  4,995
  5,705
  6,463
  7,268
  8,120
  9,016
  9,957
  10,941
  11,970
  13,042
  14,159
  15,321
  16,529
Earnings before tax, $m
  -24
  211
  414
  697
  1,081
  1,586
  2,233
  3,042
  4,031
  5,217
  6,612
  8,407
  10,247
  12,317
  14,617
  17,147
  19,904
  22,883
  26,079
  29,488
  33,105
  36,923
  40,941
  45,155
  49,564
  54,166
  58,964
  63,959
  69,155
  74,557
  80,170
Tax expense, $m
  -61
  57
  112
  188
  292
  428
  603
  821
  1,088
  1,409
  1,785
  2,270
  2,767
  3,326
  3,947
  4,630
  5,374
  6,178
  7,041
  7,962
  8,938
  9,969
  11,054
  12,192
  13,382
  14,625
  15,920
  17,269
  18,672
  20,130
  21,646
Net income, $m
  33
  154
  302
  509
  789
  1,158
  1,630
  2,221
  2,943
  3,808
  4,827
  6,137
  7,480
  8,991
  10,671
  12,517
  14,530
  16,704
  19,038
  21,526
  24,166
  26,954
  29,887
  32,963
  36,182
  39,541
  43,044
  46,690
  50,483
  54,426
  58,524

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  310
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,321
  4,807
  7,427
  11,108
  16,117
  22,738
  31,260
  41,960
  55,096
  70,896
  89,547
  111,197
  135,949
  163,864
  194,966
  229,246
  266,668
  307,179
  350,714
  397,202
  446,572
  498,762
  553,716
  611,392
  671,765
  734,825
  800,580
  869,058
  940,306
  1,014,387
  1,091,385
Adjusted assets (=assets-cash), $m
  3,011
  4,807
  7,427
  11,108
  16,117
  22,738
  31,260
  41,960
  55,096
  70,896
  89,547
  111,197
  135,949
  163,864
  194,966
  229,246
  266,668
  307,179
  350,714
  397,202
  446,572
  498,762
  553,716
  611,392
  671,765
  734,825
  800,580
  869,058
  940,306
  1,014,387
  1,091,385
Revenue / Adjusted assets
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
  0.216
Average production assets, $m
  639
  1,023
  1,580
  2,363
  3,429
  4,838
  6,651
  8,927
  11,722
  15,084
  19,052
  23,658
  28,925
  34,864
  41,481
  48,774
  56,736
  65,355
  74,618
  84,509
  95,013
  106,117
  117,809
  130,080
  142,925
  156,341
  170,331
  184,901
  200,059
  215,821
  232,203
Working capital, $m
  224
  -127
  -196
  -293
  -425
  -599
  -824
  -1,106
  -1,452
  -1,868
  -2,360
  -2,930
  -3,583
  -4,318
  -5,138
  -6,041
  -7,027
  -8,095
  -9,242
  -10,467
  -11,768
  -13,143
  -14,592
  -16,111
  -17,702
  -19,364
  -21,097
  -22,901
  -24,779
  -26,731
  -28,760
Total debt, $m
  975
  1,804
  3,025
  4,740
  7,074
  10,160
  14,131
  19,117
  25,239
  32,601
  41,293
  51,382
  62,916
  75,925
  90,418
  106,393
  123,831
  142,709
  162,997
  184,660
  207,667
  231,987
  257,596
  284,473
  312,606
  341,992
  372,634
  404,545
  437,746
  472,268
  508,149
Total liabilities, $m
  1,411
  2,240
  3,461
  5,176
  7,510
  10,596
  14,567
  19,553
  25,675
  33,037
  41,729
  51,818
  63,352
  76,361
  90,854
  106,829
  124,267
  143,145
  163,433
  185,096
  208,103
  232,423
  258,032
  284,909
  313,042
  342,428
  373,070
  404,981
  438,182
  472,704
  508,585
Total equity, $m
  1,910
  2,567
  3,966
  5,932
  8,606
  12,142
  16,693
  22,407
  29,421
  37,858
  47,818
  59,379
  72,597
  87,504
  104,112
  122,417
  142,401
  164,034
  187,281
  212,106
  238,470
  266,339
  295,684
  326,484
  358,722
  392,396
  427,510
  464,077
  502,123
  541,683
  582,799
Total liabilities and equity, $m
  3,321
  4,807
  7,427
  11,108
  16,116
  22,738
  31,260
  41,960
  55,096
  70,895
  89,547
  111,197
  135,949
  163,865
  194,966
  229,246
  266,668
  307,179
  350,714
  397,202
  446,573
  498,762
  553,716
  611,393
  671,764
  734,824
  800,580
  869,058
  940,305
  1,014,387
  1,091,384
Debt-to-equity ratio
  0.510
  0.700
  0.760
  0.800
  0.820
  0.840
  0.850
  0.850
  0.860
  0.860
  0.860
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
Adjusted equity ratio
  0.531
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  33
  154
  302
  509
  789
  1,158
  1,630
  2,221
  2,943
  3,808
  4,827
  6,137
  7,480
  8,991
  10,671
  12,517
  14,530
  16,704
  19,038
  21,526
  24,166
  26,954
  29,887
  32,963
  36,182
  39,541
  43,044
  46,690
  50,483
  54,426
  58,524
Depreciation, amort., depletion, $m
  124
  238
  269
  313
  373
  451
  553
  680
  836
  1,024
  1,246
  1,322
  1,616
  1,948
  2,317
  2,725
  3,170
  3,651
  4,169
  4,721
  5,308
  5,928
  6,581
  7,267
  7,985
  8,734
  9,516
  10,330
  11,177
  12,057
  12,972
Funds from operations, $m
  114
  392
  572
  822
  1,162
  1,609
  2,183
  2,901
  3,779
  4,832
  6,072
  7,459
  9,096
  10,939
  12,988
  15,242
  17,699
  20,356
  23,207
  26,248
  29,474
  32,882
  36,469
  40,230
  44,166
  48,276
  52,559
  57,020
  61,659
  66,483
  71,497
Change in working capital, $m
  -20
  -48
  -69
  -97
  -132
  -174
  -225
  -282
  -346
  -416
  -491
  -571
  -652
  -736
  -820
  -903
  -986
  -1,068
  -1,147
  -1,225
  -1,301
  -1,375
  -1,448
  -1,520
  -1,591
  -1,662
  -1,733
  -1,805
  -1,878
  -1,952
  -2,029
Cash from operations, $m
  134
  657
  641
  919
  1,294
  1,784
  2,407
  3,183
  4,125
  5,249
  6,564
  8,029
  9,749
  11,675
  13,808
  16,146
  18,686
  21,423
  24,354
  27,473
  30,775
  34,258
  37,917
  41,750
  45,757
  49,937
  54,292
  58,824
  63,537
  68,435
  73,526
Maintenance CAPEX, $m
  0
  -36
  -57
  -88
  -132
  -192
  -270
  -372
  -499
  -655
  -843
  -1,064
  -1,322
  -1,616
  -1,948
  -2,317
  -2,725
  -3,170
  -3,651
  -4,169
  -4,721
  -5,308
  -5,928
  -6,581
  -7,267
  -7,985
  -8,734
  -9,516
  -10,330
  -11,177
  -12,057
New CAPEX, $m
  -23
  -384
  -557
  -783
  -1,066
  -1,409
  -1,813
  -2,277
  -2,795
  -3,361
  -3,968
  -4,606
  -5,266
  -5,939
  -6,617
  -7,293
  -7,962
  -8,619
  -9,262
  -9,891
  -10,504
  -11,104
  -11,692
  -12,271
  -12,845
  -13,417
  -13,990
  -14,569
  -15,159
  -15,762
  -16,382
Cash from investing activities, $m
  186
  -420
  -614
  -871
  -1,198
  -1,601
  -2,083
  -2,649
  -3,294
  -4,016
  -4,811
  -5,670
  -6,588
  -7,555
  -8,565
  -9,610
  -10,687
  -11,789
  -12,913
  -14,060
  -15,225
  -16,412
  -17,620
  -18,852
  -20,112
  -21,402
  -22,724
  -24,085
  -25,489
  -26,939
  -28,439
Free cash flow, $m
  320
  237
  26
  48
  96
  183
  324
  534
  832
  1,232
  1,753
  2,359
  3,161
  4,119
  5,243
  6,535
  7,999
  9,634
  11,440
  13,413
  15,550
  17,846
  20,297
  22,898
  25,645
  28,536
  31,568
  34,739
  38,049
  41,497
  45,087
Issuance/(repayment) of debt, $m
  -237
  836
  1,221
  1,715
  2,334
  3,086
  3,971
  4,986
  6,121
  7,362
  8,692
  10,089
  11,534
  13,009
  14,493
  15,974
  17,439
  18,878
  20,287
  21,663
  23,007
  24,320
  25,608
  26,877
  28,134
  29,386
  30,642
  31,911
  33,201
  34,522
  35,881
Issuance/(repurchase) of shares, $m
  12
  0
  152
  202
  245
  267
  255
  193
  62
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -228
  836
  1,373
  1,917
  2,579
  3,353
  4,226
  5,179
  6,183
  7,362
  8,692
  10,089
  11,534
  13,009
  14,493
  15,974
  17,439
  18,878
  20,287
  21,663
  23,007
  24,320
  25,608
  26,877
  28,134
  29,386
  30,642
  31,911
  33,201
  34,522
  35,881
Total cash flow (excl. dividends), $m
  91
  1,074
  1,247
  1,763
  2,430
  3,269
  4,295
  5,521
  6,953
  8,595
  10,444
  12,448
  14,695
  17,128
  19,736
  22,509
  25,438
  28,513
  31,727
  35,077
  38,557
  42,166
  45,905
  49,775
  53,779
  57,922
  62,210
  66,650
  71,250
  76,019
  80,968
Retained Cash Flow (-), $m
  -879
  -960
  -1,399
  -1,965
  -2,675
  -3,536
  -4,551
  -5,714
  -7,015
  -8,437
  -9,960
  -11,561
  -13,218
  -14,907
  -16,608
  -18,305
  -19,983
  -21,633
  -23,248
  -24,824
  -26,364
  -27,869
  -29,345
  -30,799
  -32,239
  -33,674
  -35,113
  -36,567
  -38,046
  -39,559
  -41,117
Prev. year cash balance distribution, $m
 
  303
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  416
  0
  0
  0
  0
  0
  0
  0
  158
  485
  887
  1,477
  2,221
  3,128
  4,204
  5,454
  6,880
  8,480
  10,252
  12,193
  14,297
  16,560
  18,976
  21,540
  24,248
  27,097
  30,083
  33,204
  36,460
  39,851
Discount rate, %
 
  5.90
  6.20
  6.50
  6.83
  7.17
  7.53
  7.91
  8.30
  8.72
  9.15
  9.61
  10.09
  10.60
  11.13
  11.68
  12.27
  12.88
  13.52
  14.20
  14.91
  15.65
  16.44
  17.26
  18.12
  19.03
  19.98
  20.98
  22.03
  23.13
  24.29
PV of cash for distribution, $m
 
  393
  0
  0
  0
  0
  0
  0
  0
  74
  202
  323
  466
  600
  714
  802
  857
  877
  865
  823
  757
  674
  582
  487
  396
  311
  238
  176
  126
  87
  59
Current shareholders' claim on cash, %
  100
  100.0
  94.6
  90.3
  86.8
  84.3
  82.7
  81.8
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6
  81.6

TiVo Corporation provides entertainment technology and audience insights in worldwide. Its Intellectual Property Licensing segment licenses its patent portfolio to multi-channel video service providers, including cable, satellite, and Internet-protocol television providers; set-top box manufacturers; and interactive television software and program guide providers in the online, over-the-top (OTT) video, and mobile phone businesses, as well as consumer electronics (CE) manufacturers. This segment’s portfolio of licensable technology patents covers various aspects of content discovery, digital video recorder (DVR), video-on-demand (VOD), OTT experiences, multi-screen functionality, and personalization, as well as interactive applications and advertising. The company’s Product segment offers platform solutions, such as TiVo Service Platform, a cloud-based service that powers the TiVo Service client software, which operates on set-top boxes in consumer homes, as well as applications that operate on third party software platforms, such as iOS and Android; interactive program guide (IPG) solutions that allow service providers to customize elements of the IPGs for their customers, and to upgrade the features and services they can offer; CE Guides under the G-GUIDE and HTML Guide brands; and CubiTV and TiVo Lite middleware solutions. It also provides television, sports, movies, music, celebrities, books, and video games metadata; advanced search, recommendation, and conversation services; data and analytics solutions; Ad Optimizer and Promotion Optimizer browser based software-as-a-service applications; operator and seamless insights applications; IPG advertising services; analog content protection technologies; and VCR Plus+, connected platform, and media recognition products. The company was formerly known as Rovi Corporation and changed its name to TiVo Corporation in September 2016. TiVo Corporation was founded in 1983 and is headquartered in San Carlos, California.

FINANCIAL RATIOS  of  TiVo (TIVO)

Valuation Ratios
P/E Ratio 59.7
Price to Sales 3
Price to Book 1
Price to Tangible Book
Price to Cash Flow 14.7
Price to Free Cash Flow 17.7
Growth Rates
Sales Growth Rate 23.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 109.1%
Cap. Spend. - 3 Yr. Gr. Rate 3.9%
Financial Strength
Quick Ratio 44
Current Ratio 0
LT Debt to Equity 50.7%
Total Debt to Equity 51%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.5%
Ret/ On Assets - 3 Yr. Avg. -2.5%
Return On Total Capital 1.4%
Ret/ On T. Cap. - 3 Yr. Avg. -0.6%
Return On Equity 2.2%
Return On Equity - 3 Yr. Avg. -1.3%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 75.5%
Gross Margin - 3 Yr. Avg. 78.7%
EBITDA Margin 20%
EBITDA Margin - 3 Yr. Avg. 23.9%
Operating Margin 3.2%
Oper. Margin - 3 Yr. Avg. 10%
Pre-Tax Margin -3.7%
Pre-Tax Margin - 3 Yr. Avg. -0.3%
Net Profit Margin 5.1%
Net Profit Margin - 3 Yr. Avg. -2.9%
Effective Tax Rate 254.2%
Eff/ Tax Rate - 3 Yr. Avg. 244%
Payout Ratio 0%

TIVO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TIVO stock intrinsic value calculation we used $649 million for the last fiscal year's total revenue generated by TiVo. The default revenue input number comes from 2016 income statement of TiVo. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TIVO stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.9%, whose default value for TIVO is calculated based on our internal credit rating of TiVo, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of TiVo.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TIVO stock the variable cost ratio is equal to 86.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TIVO stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for TiVo.

Corporate tax rate of 27% is the nominal tax rate for TiVo. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TIVO stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TIVO are equal to 98.5%.

Life of production assets of 17.9 years is the average useful life of capital assets used in TiVo operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TIVO is equal to -12.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1910 million for TiVo - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 122.086 million for TiVo is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of TiVo at the current share price and the inputted number of shares is $2.0 billion.


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COMPANY NEWS

▶ TiVo says CEO plans to leave company after 11 years   [May-24-17 05:00PM  MarketWatch]
▶ TiVo President and CEO to Retire   [04:15PM  Business Wire]
▶ ETFs with exposure to TiVo Corp. : May 19, 2017   [May-19-17 02:11PM  Capital Cube]
▶ ETFs with exposure to TiVo Corp. : May 8, 2017   [May-08-17 05:20PM  Capital Cube]
▶ Stock Market News for May 04, 2017   [May-04-17 10:04AM  Zacks]
▶ TiVo reports 1Q loss   [May-03-17 05:16PM  Associated Press]
▶ Turner EMEA Selects TiVo to Provide Enhanced EPG Services   [Apr-24-17 08:00AM  Business Wire]
▶ TiVo Corp. Value Analysis (NASDAQ:TIVO) : April 19, 2017   [Apr-19-17 03:21PM  Capital Cube]
▶ Tivo Stock Sliding Despite Signing Multi-Year Roku Deal   [Apr-12-17 10:20AM  TheStreet.com]
▶ Roz Ho Joins TiVo to Lead Consumer and Metadata Teams   [Apr-03-17 11:30AM  Business Wire]
▶ TiVo Signs Patent License Agreement with DWANGO   [Mar-28-17 08:00AM  Business Wire]
▶ TiVo Partners with Sky to Launch Voice Search   [Mar-22-17 04:24AM  Business Wire]
▶ TiVo Hires Walt Horstman to Lead Analytics and Advertising   [Mar-13-17 08:00AM  Business Wire]
▶ Why NetEase, Denny's, and TiVo Jumped Today   [Feb-16-17 04:40PM  at Motley Fool]
▶ TiVo at Cusp of Big Breakout   [01:49PM  at Investopedia]
▶ Why TiVo Corp. Jumped 14% Today   [01:46PM  at Motley Fool]
▶ YuppTV Now Available Worldwide on TiVo Devices   [Jan-24-17 07:30AM  Business Wire]
▶ Why TiVo Corp. Gained 23% in 2016   [Jan-18-17 05:43PM  at Motley Fool]
▶ Should You Avoid Kennedy-Wilson Holdings Inc (KW)?   [Dec-11-16 08:35AM  at Insider Monkey]
▶ Should You Follow the Smart Money Out of TiVo Corp (TIVO)?   [Dec-07-16 01:20PM  at Insider Monkey]
Stock chart of TIVO Financial statements of TIVO Annual reports of TIVO
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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