TiVo Inc. climbed to its highest since May 2010 as the digital-video recording provider expands technology offerings and benefits from patent-lawsuit settlements and new client contracts.
TiVo climbed as much as 63 cents, or 5.6 percent, to $11.86 in Nasdaq Stock Market trading. The Alviso, California-based company rose about 4 percent in 2011.
TiVo “solved some of the issues that were challenging them in the past and are addressing some of the issues important for the future,” James C. Goss, an analyst at Barrington Research Associates Inc. in Chicago, said in a telephone interview.
Goss initiated coverage of TiVo last week with an “outperform” rating and target price of $14 a share.
TiVo has “defended its patents successfully, and while it benefits from the lawsuit settlements, these relate to past issues,” Goss said. “What’s more important is how the relationships are going forward. They may want to renew relationships and collect royalties on an ongoing basis.”
Last month, AT&T Inc. agreed to pay TiVo at least $215 million to settle a patent lawsuit over digital video recorders.
TiVo, a pioneer in the market for set-top boxes that can record a TV program and play it back at the same time, had lost customers to offerings from TV-service providers including AT&T and Verizon Communications Inc.
TiVo accused those companies of using its patented time- warp technology, which also was at the center of a dispute with Dish Network Corp. that was resolved with as much as $600 million in settlements.
TiVo is expanding through partnerships with companies such as Charter Communications Inc. and Virgin Media Inc., which is expected to announce a full rollout of TiVo to its television base later this week, according to an article in Barron’s.
“The Barron’s article helped TiVo today,” Goss said. “The relationships TiVo has with Virgin and Charter look very promising going forward. TiVo could benefit from any Virgin announcement that they are expanding TiVo service in their subscriber base.”
Cable operators around the world are licensing TiVo technology in set-top boxes that can connect to the Internet. A number of smaller and medium-sized cable and satellite companies in the U.S. and abroad could form partnerships and lead to additional businesses, Goss said.
TiVo also may be a candidate for takeover by Microsoft Corp. or Google Inc., Barron’s reported.x
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