Rovi CorpROVI

Morningstar Rating

Stock Research and Analysis

by Andrew Lange

Rovi's backbone is the strength of its patent portfolio. We believe the company's 5,300 issued and pending patents worldwide give it a narrow economic moat. With roughly 70% of revenue booked before the year begins and licensing contracts that last Read more

Bulls Say

Roughly 70% of Rovi's revenue is recurring, with a significant portion governed by long-term contracts. The company is also often able to push through price increases upon contract renewal.

Rovi's advertising network could be a meaningful growth driver in the future.

The firm has an ingrained position within the entertainment industry, serving high-profile entertainment companies, CE manufacturers, service providers, and retailers.

Google's Fiber TV service recently signed a multiyear licensing deal with Rovi. The deal highlights Rovi's market significance in IPG patents for content discovery, as well as online and mobile platforms. Read more

Bears Say

The company can now no longer rely on the revenue contribution from the analog content protection business. The decline was far more sudden than expected and highlights the unpredictable nature of technology.

The downside with being a patent protectionist is that Rovi's efforts to defend its intellectual property may conflict directly with potential customers.

DivX plus streaming is in the early stages of development and may not generate acceptable returns.

Macroeconomic issues have an impact on consumer electronic sales. Economic weakness would inhibit Rovi's revenue growth. Read more

Management

Tom Carson, who joined Rovi in 2008 through the Gemstar-TV acquisition, was named CEO in December 2011. We believe Carson is an appropriate successor to Alfred Amoroso given his digital and entertainment background at Gemstar-TV. Peter Halt was named Read more

Profile

Rovi Corporation, formerly known as Macrovision, is a digital-entertainment company that provides media guides, entertainment metadata, cloud services, video streaming, Read more