Monday, July 27, 2020 12:51:46 PM
Xperi Holding is an obscure San Jose—based company that has piled up a remarkable collection of tech patents—and the stock seems seriously underpriced. Xperi (XPER) was built through a multiyear series of acquisitions. The cornerstone deal was in June, when Xperi combined with TiVo, the once-iconic producer of digital video recorders.
With the TiVo deal closed, Xperi has 11,000 patents, many focused on video and audio technology; annual revenue of well over $1 billion; and more than $420 million in annual cash flow. Xperi has an enterprise value of about $2.4 billion, which seems absurdly low. Comparable companies like InterDigital (IDCC), Dolby Laboratories (DLB), and Rambus (RMBS) trade in the range of four to six times revenue; Xperi trades for under two times revenue.
To address that issue, Xperi plans to divide into two companies. CEO Jon Kirchner thinks that a split can unlock considerable value. About half of its business comes from patent licensing. The other half produces software, which it monetizes with a licensing model—similar to what Dolby does.
B. Riley analyst Eric Wold has a Buy rating on Xperi shares and a price target of $35—more than double their recent price of $15. “Considering the attractiveness of a combined portfolio…and continued evolution of media inside and outside the home, we see an opportunity for increased penetration of existing customer relationships with the combined offerings,” he wrote in a recent research note.
The kicker is TiVo’s long-running patent dispute with Comcast (CMCSA). TiVo has been asserting that Comcast’s X1 set-top box violates its patents. TiVo has sued Comcast three times before the U.S. International Trade Commission, seeking an injunction barring the sale of the X1 box. The first two times, TiVo won, but Comcast figured out workarounds and paid nothing. The third trial decision is due this week. Wold thinks that a win could mean as much as $55 million a year in royalty payments and a catch-up payment of as much as $275 million. But Wold isn’t counting on a win—even without one, Xperi looks remarkably cheap.
Recent XPER News
- TiVo Expands European Presence with Advanced Content Discovery Platform and TiVo Broadband • Business Wire • 09/10/2024 08:00:00 AM
- TiVo Announces Expanded Availability of Smart TVs Powered by TiVo Across Its OEM Partners • Business Wire • 09/04/2024 08:00:00 AM
- DTS Launches Clear Dialogue to Improve Dialogue Intelligibility on TVs • Business Wire • 09/04/2024 08:00:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/27/2024 08:38:01 PM
- TiVo Broadband Adds Five New Operators • Business Wire • 08/19/2024 12:30:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/16/2024 08:05:10 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/08/2024 08:15:40 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/05/2024 08:15:10 PM
- Xperi Inc. Announces Second Quarter 2024 Results • Business Wire • 08/05/2024 08:05:00 PM
- Most Listened-To Songs In-Vehicle for Q2 2024, Revealed by Xperi • Business Wire • 07/23/2024 01:30:00 PM
- Xperi to Release Second Quarter 2024 Results on August 5, 2024 • Business Wire • 07/10/2024 08:05:00 PM
- DTS Reports Radio Remains Crucial While Video and Gaming Surge In-Vehicle • Business Wire • 06/12/2024 12:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/11/2024 08:04:21 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 06/11/2024 08:02:02 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/10/2024 08:10:10 PM
- Xperi Announces Appointment of Two New Independent Directors • Business Wire • 06/10/2024 08:05:00 PM
- KKR, CrowdStrike Holdings and GoDaddy Set to Join S&P 500; Others to Join S&P MidCap 400 and S&P SmallCap 600 • PR Newswire (US) • 06/07/2024 10:09:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/31/2024 10:15:33 AM
- Rubric Capital Management Issues Open Letter to Xperi Inc. Stockholders Regarding 2024 Annual Meeting Results • Business Wire • 05/28/2024 09:00:00 PM
- Stockholders Re-Elect All Five Xperi Incumbent Directors at 2024 Annual Meeting • Business Wire • 05/24/2024 12:52:00 PM
- Xperi’s Independent Media Platform Expands With TiVo One, a Cross-Screen Ad Platform for Maximizing Engagement and Monetization • Business Wire • 05/21/2024 12:00:00 PM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/21/2024 11:44:56 AM
- All Three Leading Independent Proxy Advisory Firms Support All Xperi Board Candidates • Business Wire • 05/21/2024 11:15:00 AM
- Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material • Edgar (US Regulatory) • 05/17/2024 12:00:26 PM
- Xperi Issues Letter to Shareholders Highlighting Actions Taken to Position the Company to Create Long-Term Value • Business Wire • 05/17/2024 11:15:00 AM
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