Intrinsic value of TiVo Corporation - TIVO

Previous Close

$6.84

  Intrinsic Value

$6.84

stock screener

  Rating & Target

hold

0%

Previous close

$6.84

 
Intrinsic value

$6.84

 
Up/down potential

0%

 
Rating

hold

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 0001), $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 0.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  710
  726
  745
  766
  789
  815
  842
  872
  905
  939
  977
  1,016
  1,058
  1,103
  1,151
  1,201
  1,255
  1,311
  1,371
  1,434
  1,500
  1,570
  1,644
  1,722
  1,804
  1,890
  1,981
  2,077
  2,177
  2,283
Variable operating expenses, $m
  714
  725
  739
  754
  770
  788
  808
  830
  853
  878
  699
  727
  757
  789
  823
  859
  897
  938
  981
  1,026
  1,073
  1,123
  1,176
  1,232
  1,290
  1,352
  1,417
  1,485
  1,557
  1,633
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
  714
  725
  739
  754
  770
  788
  808
  830
  853
  878
  699
  727
  757
  789
  823
  859
  897
  938
  981
  1,026
  1,073
  1,123
  1,176
  1,232
  1,290
  1,352
  1,417
  1,485
  1,557
  1,633
Operating income, $m
  -4
  1
  6
  12
  19
  26
  34
  43
  52
  62
  278
  289
  301
  314
  328
  342
  357
  373
  390
  408
  427
  447
  468
  490
  514
  538
  564
  591
  620
  650
EBITDA, $m
  290
  297
  305
  313
  323
  333
  344
  357
  370
  384
  399
  415
  433
  451
  470
  491
  513
  536
  560
  586
  613
  642
  672
  704
  737
  773
  810
  849
  890
  933
Interest expense (income), $m
  30
  54
  55
  56
  58
  59
  61
  64
  66
  69
  71
  74
  77
  81
  84
  88
  92
  97
  101
  106
  111
  116
  122
  128
  134
  141
  148
  155
  163
  171
  180
Earnings before tax, $m
  -57
  -54
  -50
  -45
  -41
  -35
  -30
  -23
  -17
  -10
  204
  212
  221
  230
  239
  250
  261
  272
  284
  297
  311
  325
  340
  356
  373
  390
  409
  428
  449
  470
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  55
  57
  60
  62
  65
  67
  70
  73
  77
  80
  84
  88
  92
  96
  101
  105
  110
  116
  121
  127
Net income, $m
  -57
  -54
  -50
  -45
  -41
  -35
  -30
  -23
  -17
  -10
  149
  155
  161
  168
  175
  182
  190
  199
  208
  217
  227
  237
  248
  260
  272
  285
  298
  313
  328
  343

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  2,639
  2,700
  2,769
  2,847
  2,933
  3,028
  3,131
  3,243
  3,363
  3,492
  3,630
  3,778
  3,934
  4,101
  4,278
  4,466
  4,664
  4,874
  5,096
  5,330
  5,577
  5,837
  6,112
  6,401
  6,706
  7,027
  7,365
  7,720
  8,094
  8,487
Adjusted assets (=assets-cash), $m
  2,639
  2,700
  2,769
  2,847
  2,933
  3,028
  3,131
  3,243
  3,363
  3,492
  3,630
  3,778
  3,934
  4,101
  4,278
  4,466
  4,664
  4,874
  5,096
  5,330
  5,577
  5,837
  6,112
  6,401
  6,706
  7,027
  7,365
  7,720
  8,094
  8,487
Revenue / Adjusted assets
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
Average production assets, $m
  1,207
  1,235
  1,266
  1,302
  1,341
  1,385
  1,432
  1,483
  1,538
  1,597
  1,660
  1,728
  1,799
  1,875
  1,956
  2,042
  2,133
  2,229
  2,330
  2,437
  2,550
  2,669
  2,795
  2,927
  3,067
  3,213
  3,368
  3,530
  3,701
  3,881
Working capital, $m
  41
  42
  43
  44
  46
  47
  49
  51
  52
  54
  57
  59
  61
  64
  67
  70
  73
  76
  80
  83
  87
  91
  95
  100
  105
  110
  115
  120
  126
  132
Total debt, $m
  1,014
  1,039
  1,069
  1,102
  1,138
  1,179
  1,222
  1,270
  1,321
  1,375
  1,434
  1,496
  1,563
  1,634
  1,709
  1,788
  1,872
  1,961
  2,055
  2,154
  2,259
  2,370
  2,486
  2,609
  2,738
  2,874
  3,017
  3,168
  3,326
  3,493
Total liabilities, $m
  1,119
  1,145
  1,174
  1,207
  1,244
  1,284
  1,328
  1,375
  1,426
  1,481
  1,539
  1,602
  1,668
  1,739
  1,814
  1,893
  1,978
  2,067
  2,161
  2,260
  2,365
  2,475
  2,592
  2,714
  2,843
  2,979
  3,123
  3,273
  3,432
  3,599
Total equity, $m
  1,520
  1,555
  1,595
  1,640
  1,690
  1,744
  1,804
  1,868
  1,937
  2,012
  2,091
  2,176
  2,266
  2,362
  2,464
  2,572
  2,687
  2,807
  2,935
  3,070
  3,212
  3,362
  3,521
  3,687
  3,863
  4,048
  4,242
  4,447
  4,662
  4,889
Total liabilities and equity, $m
  2,639
  2,700
  2,769
  2,847
  2,934
  3,028
  3,132
  3,243
  3,363
  3,493
  3,630
  3,778
  3,934
  4,101
  4,278
  4,465
  4,665
  4,874
  5,096
  5,330
  5,577
  5,837
  6,113
  6,401
  6,706
  7,027
  7,365
  7,720
  8,094
  8,488
Debt-to-equity ratio
  0.670
  0.670
  0.670
  0.670
  0.670
  0.680
  0.680
  0.680
  0.680
  0.680
  0.690
  0.690
  0.690
  0.690
  0.690
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.700
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
  0.710
Adjusted equity ratio
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -57
  -54
  -50
  -45
  -41
  -35
  -30
  -23
  -17
  -10
  149
  155
  161
  168
  175
  182
  190
  199
  208
  217
  227
  237
  248
  260
  272
  285
  298
  313
  328
  343
Depreciation, amort., depletion, $m
  294
  296
  298
  301
  304
  307
  310
  314
  318
  322
  121
  126
  131
  137
  143
  149
  156
  163
  170
  178
  186
  195
  204
  214
  224
  235
  246
  258
  270
  283
Funds from operations, $m
  237
  242
  248
  255
  263
  272
  281
  291
  301
  313
  270
  281
  292
  305
  318
  331
  346
  361
  378
  395
  413
  432
  452
  474
  496
  519
  544
  570
  598
  627
Change in working capital, $m
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
Cash from operations, $m
  236
  241
  247
  254
  262
  270
  279
  289
  299
  311
  268
  278
  290
  302
  315
  328
  343
  358
  374
  391
  409
  428
  448
  469
  491
  514
  539
  565
  592
  621
Maintenance CAPEX, $m
  -86
  -88
  -90
  -92
  -95
  -98
  -101
  -105
  -108
  -112
  -117
  -121
  -126
  -131
  -137
  -143
  -149
  -156
  -163
  -170
  -178
  -186
  -195
  -204
  -214
  -224
  -235
  -246
  -258
  -270
New CAPEX, $m
  -24
  -28
  -32
  -36
  -39
  -43
  -47
  -51
  -55
  -59
  -63
  -67
  -72
  -76
  -81
  -86
  -91
  -96
  -101
  -107
  -113
  -119
  -126
  -132
  -139
  -147
  -154
  -163
  -171
  -180
Cash from investing activities, $m
  -110
  -116
  -122
  -128
  -134
  -141
  -148
  -156
  -163
  -171
  -180
  -188
  -198
  -207
  -218
  -229
  -240
  -252
  -264
  -277
  -291
  -305
  -321
  -336
  -353
  -371
  -389
  -409
  -429
  -450
Free cash flow, $m
  126
  125
  125
  126
  127
  129
  131
  133
  136
  139
  88
  90
  92
  94
  97
  100
  103
  106
  110
  114
  118
  123
  128
  133
  138
  144
  150
  156
  163
  170
Issuance/(repayment) of debt, $m
  21
  26
  29
  33
  37
  40
  44
  47
  51
  55
  59
  62
  67
  71
  75
  79
  84
  89
  94
  99
  105
  110
  116
  123
  129
  136
  143
  151
  159
  167
Issuance/(repurchase) of shares, $m
  84
  89
  90
  90
  90
  90
  89
  88
  86
  84
  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  
  105
  115
  119
  123
  127
  130
  133
  135
  137
  139
  59
  62
  67
  71
  75
  79
  84
  89
  94
  99
  105
  110
  116
  123
  129
  136
  143
  151
  159
  167
Total cash flow (excl. dividends), $m
  232
  240
  245
  249
  254
  259
  264
  268
  273
  278
  147
  152
  159
  165
  172
  179
  187
  195
  204
  213
  223
  233
  244
  255
  267
  280
  293
  307
  322
  337
Retained Cash Flow (-), $m
  -84
  -89
  -90
  -90
  -90
  -90
  -89
  -88
  -86
  -84
  -80
  -85
  -90
  -96
  -102
  -108
  -114
  -121
  -128
  -135
  -142
  -150
  -158
  -167
  -176
  -185
  -195
  -205
  -215
  -227
Prev. year cash balance distribution, $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 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
  147
  151
  155
  159
  164
  169
  175
  181
  187
  194
  67
  68
  68
  69
  70
  71
  73
  75
  76
  78
  81
  83
  86
  89
  92
  95
  99
  102
  106
  111
Discount rate, %
  5.80
  6.09
  6.39
  6.71
  7.05
  7.40
  7.77
  8.16
  8.57
  9.00
  9.45
  9.92
  10.42
  10.94
  11.48
  12.06
  12.66
  13.29
  13.96
  14.66
  15.39
  16.16
  16.97
  17.81
  18.71
  19.64
  20.62
  21.65
  22.74
  23.87
PV of cash for distribution, $m
  139
  134
  129
  123
  117
  110
  103
  96
  89
  82
  25
  22
  19
  16
  14
  12
  10
  8
  6
  5
  4
  3
  2
  2
  1
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  92.5
  85.4
  78.9
  73.0
  67.7
  62.9
  58.6
  54.8
  51.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4
  48.4

TiVo Corporation is engaged in offering media and entertainment products. The Company operates through two segments: Intellectual Property Licensing and Product. The Company's Product segment includes a suite of component technologies that can be integrated into media service provider internally developed platforms or deployed as an integrated TiVo solution. The Company provides a range of intellectual property, cloud-based services and set-top box solutions that enable people to use online video, television, movies and music entertainment, including content discovery through device embedded and cloud-based interactive program guides (IPGs), digital video recorders (DVRs), natural language voice and text search, cloud-based recommendations services and its entertainment metadata (descriptive information, promotional images or other content that describes or relates to television shows, videos, movies, sports, music, books, games or other entertainment content).

FINANCIAL RATIOS  of  TiVo Corporation (TIVO)

Valuation Ratios
P/E Ratio 24.9
Price to Sales 1.3
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow 6.1
Price to Free Cash Flow 7.4
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 $696 million for the last fiscal year's total revenue generated by TiVo Corporation. The default revenue input number comes from 0001 income statement of TiVo Corporation. 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 2% 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 5.8%, whose default value for TIVO is calculated based on our internal credit rating of TiVo Corporation, 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 Corporation.
    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 101.1%.

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 5.4% for TiVo Corporation.

Corporate tax rate of 27% is the nominal tax rate for TiVo Corporation. 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 170%.

Life of production assets of 13.7 years is the average useful life of capital assets used in TiVo Corporation 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 5.8%. 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 - $1492.941 million for TiVo Corporation - 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 124.865 million for TiVo Corporation 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 Corporation at the current share price and the inputted number of shares is $0.9 billion.

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