Rich Tullo Believes Stale TIVO Views Create Fresh Opportunities

In a report published Thursday, Albert Fried & Company analyst Rich Tullo suggested that it is time to dismiss the bear case in TiVo Inc. (NASDAQ: TIVO) as shares continue flirting with its 52-week lows.

According to Tullo, the bear thesis needs to be revisited and the competitive threats it faces need to be re-examined. As an example, Apple Inc. (NASDAQ: AAPL)'s recent price drop on its Apple TV is more a direct threat to Linear Cable TV than TiVo, according to the analyst.

"TiVo was invented as a value added experience for Terrestrial TV and in a cord splicing environment the DVR provides a better experience versus Streaming content from two to four providers," Tullo wrote. "While Aereo had legal problems with its service, we expect no such conflict with the TiVo reboot as the law on DVRs and the Terrestrial TV antenna is established."

In fact, Tullo argued that in his view, the bear case is "not as relevant" as TiVo's opportunities. In an environment that continues to shift towards RTB (real-time-bidding) advertising, TiVo controls a lot of Meta Data and that has strategic content. The company knows what content its viewers are watching over the air, on line and on Linear TV.

Tullo continued that more importantly, TiVo also knows on a user level who is watching what and on what device. This is vital as the company knows "what ads works for the 40 year old watching Fairly Odd Parents, and what ad works for the 13 year old who aspires to be a PHD in Biology."

Tullo also noted that TiVo's license agreements will begin to expire in 2016 but he has confidence that the company is taking "vital steps" to ensure its long run growth.

Shares remain Outperform rated with an unchanged $23 price target.