Digital video recorder pioneer TiVo (Nasdaq: TIVO) reports fourth-quarter earnings tonight. Is it the beginning of the end? Whatever you want to think -- but the party ain't over yet.

What Fools say:
Here's how TiVo's CAPS rating stacks up against some of its peers and competitors:

Market Cap (millions)

Trailing P/E Ratio

CAPS Rating

Cisco Systems (Nasdaq: CSCO)

$145,448

19.0

****

Apple (Nasdaq: AAPL)

$106,986

26.7

****

Motorola (NYSE: MOT)

$22,119

N/A

**

Gemstar-TV Guide International (Nasdaq: GMST)

$2,030

11.7

***

TiVo

$884

N/A

**

Data from Yahoo! Finance and Motley Fool CAPS as of March 4.

TiVo is by no means alone in its hopes to organize our media, as you can see. Some CAPS players hate this stock because of negative earnings and the cable companies' habit of handing out nearly free non-TiVo DVRs. Others see TiVo becoming a software business, thanks to the successful legal campaign the company is waging to defend its patents on DVR technology.

What management does:
Profits are still quite a way off, assuming that the status quo continues. The margins have improved since TiVo decided to move away from subsidizing expensive hardware and focus more on marketing its products and services instead.

Margins

7/06

10/06

1/07

4/07

7/07

10/07

Gross

33.9%

33.1%

33.3%

37.6%

38.2%

41.0%

Operating

(24.8%)

(22.0%)

(14.1%)

(9.6%)

(10.5%)

(8.0%)

Net

(23.2%)

(20.4%)

(18.5%)

(13.8%)

(17.9%)

(16.2%)

FCF/Revenue

(13.6%)

(20.2%)

(15.8%)

(20.1%)

(14.5%)

(11.0%)

Y-O-Y Growth

7/06

10/06

1/07

4/07

7/07

10/07

Revenue

22.7%

24.0%

32.0%

27.4%

17.6%

13.6%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
The watershed moment that will make TiVo's shareholders rich hasn't happened yet -- but it's coming. I'm talking about the end of the EchoStar (Nasdaq: SATS) lawsuit, when all the appeals and filibustering tactics finally run out. If there's a status quo involved at that point, it'll play "Rockin' All Over the World" as TiVo turns into a high-margin software licensor that profits from every DVR box -- regardless of hardware brand or service provider. Comcast (Nasdaq: CMCSA) has already seen the writing on the wall and started to convert its off-brand DVRs into properly licensed TiVos.

That hasn't happened yet, and the wheels of the legal machinery keep grinding, ever so slowly. Until then, the day-to-day results matter only because they throw TiVo's highly volatile share price around like a paper plane. Nobody in his or her right mind would sell this stock based on a single good or bad quarter, knowing what lies ahead, so the best we can hope for is a massive miss that gives us a nice buy-in price.

Further Foolish reading:

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is the Punxsutawney Phil of financial forecasting.