Comcast is likely to join the other Big Four companies and license the IP of the narrow-moat firm.
By Andrew Lange | 05-30-17 | 11:00 AM | Email Article

On May 26, 2017,  TiVo  received the final initial determination on its U.S. International Trade Commission case against Comcast. Of the six patents brought before the court, the judge determined that two patents (8,006,263 and 8,578,413--both related to interactive TV program guidance with remote access) were in violation of section 337 (unfair competition in the importation of products into the U.S.). Meanwhile, the other four patents were found to have no violation. As a result of the ruling, TiVo’s stock has risen on the increased likelihood of an IP licensing deal with Comcast. We have already pegged the Comcast deal at a reasonable chance given TiVo’s past IP licensing deals with the rest of the Big Four companies (Dish Network, Time Warner Cable, and DirecTV). Our $22 fair value estimate and narrow economic moat rating remain unchanged on this very-high-risk, 3-star name. 

Andrew Lange is an equity analyst for Morningstar.

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