Rovi Earnings Preview

Motley Fool Staff
Updated

Rovi (NAS: ROVI) didn't meet the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Thursday, Feb. 16. Rovi focuses on powering the discovery and enjoyment of digital entertainment by providing companies a broad set of integrated solutions.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Rovi as a buy. But with 78.6% of analysts rating it a buy, Rovi is still below the mean analyst rating of its nearest nine competitors, which average 78.9% buys. Analysts don't like Rovi as much as competitor Apple overall. Thirty-eight out of 40 analysts rate Apple a buy compared to 11 of 14 for Rovi. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.

  • Revenue forecasts: On average, analysts predict $193.7 million in revenue this quarter. That would represent a rise of 38.2% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.45 per share. Estimates range from $0.37 to $0.50.

What our community says:
CAPS All-Stars are solidly backing the stock, with 91.8% giving it an "outperform" rating. Most of the community agrees with the All-Stars, with 88.4% granting it a rating of "outperform." Fools are gung-ho about Rovi, though the message boards have been quiet lately with only 58 posts in the past 30 days. Rovi's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has now gone up for three straight quarters.

Now, a look at how efficient management has been at running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. Rovi has seen slipping net margins year over year for the last three quarters. Net margins reflect what percentage of each dollar earned by the company becomes profit. Here are Rovi's reported margins for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

82.4%

83.5%

84.4%

87.7%

Operating Margin

11.5%

4.4%

14.2%

23.9%

Net Margin

0.9%

(5.6%)

10.6%

47.9%

For all our Rovi-specific analysis, including earnings and beyond, add Rovi to My Watchlist.

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Earnings estimates provided by Zacks.

At the time thisarticle was published

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