Fresh off of its court victory over satellite operator EchoStar Communications, TiVo could be a takeover candidate, according to the latest edition of Barron's.
But the digital video recording maker faces a tough road ahead, chiefly seeing its share of the DVR business being overtaken by Cisco Systems' Scientific-Atlanta and Motorola, the two largest cable set-top makers, Barron's said.
Following the $73 million jury award for TiVo, its shares reached a 12-month high of $8.26 on Thursday's trading on the Nasdaq.
Although the stock has run up 34 percent in the last 12 months, the company must increase its customer count, license the platform to as many services providers as possible, and raise revenue, Barron's said, quoting Mike Paxton, senior analyst with In-Stat.
"TiVo's competitive lead has been greatly diminished," Christopher Baggini, a senior portfolio manager with Gartmore Growth Fund, told Barron's. "(It) has become a brand name, but this doesn't mean it will be successful or that it is worth being acquired."
The company is expected to lose 62 cents per share in the year ending January 2007, on sales of $215 million with nearly 4.4 million paying subscribers. TiVo has never made a profit and has accumulated loses of more than $380 million in the past five years, Barron's said.
Still, Barron's said that the product's technology, which the company continually improves, could make TiVo a buyout candidate for a computer maker interested in enforcing the patents, or a cable operator looking for an edge, Barron's said.
