Digital media expert OpenTV (Nasdaq: OPTV) gets its turn in the limelight Thursday night when it's time for a fourth-quarter earnings report.

What Fools say:
Here's how OpenTV's Motley Fool CAPS score rates against some of its peers and competitors:

Market Cap
(in millions)

Trailing
P/E Ratio

CAPS
Rating

Time Warner Cable (NYSE: TWC)

$23,546

21.0

**

Harris (NYSE: HRS)

$7,346

14.4

*****

NDS Group (Nasdaq: NNDS)

$2,969

19.1

*****

TiVo (Nasdaq: TIVO)

$853

N/A

**

OpenTV

$145

N/A

**

Data taken from Motley Fool CAPS on Feb. 18.

Our CAPS players haven't said much about this stock lately. That's most likely because the share price has stayed below the $1.50 cutoff to qualify for new CAPS picks since last August. On Aug. 1, jonjonjhj wagered that the stock would top $3.50 a share by November. That didn't happen, but an all-star CAPS player chimed in at the very end of November to say that there would have been a thumbs-up rating there if it had been allowed. You see, insiders were loading up on company shares at the time.

For bearish comments from another CAPS All-Star (yours truly!), read on under "One Fool Says." 

What management does:
The revenue growth is hardly of world-beating caliber, but costs are scaling up as if OpenTV was about to go global. Whether or not you see that as management's vote of confidence is up to you, but there is no doubt that the financial statements are sinking deeper and deeper into the red sea.

Margins

6/2006

9/2006

12/2006

3/2007

6/2007

9/2007

Gross

58.1%

55.8%

53.9%

53.3%

51.2%

49.6%

Operating

(11.7%)

(8.7%)

(9.6%)

(10.2%)

(12.3%)

(17.1%)

Net

(7.6%)

(4.8%)

(10.6%)

(10.5%)

(12.6%)

(18.9%)

Growth (YOY)

6/2006

9/2006

12/2006

3/2007

6/2007

9/2007

Revenue

5.3%

8.1%

16.6%

15.6%

18.0%

9.8%

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:
Investing in OpenTV requires the patience of an angel. Or maybe a robot because you'd need nerves of steel. The company is about a year into a massive reorganization that started with a new CEO, and seven of 12 board members got the boot. That was Swiss majority owner Kudelski AG that imposed its will and its staff on OpenTV, as the digital security company thought it knew how to right OpenTV's wrongs.

They say it gets darker just before dawn, and we're looking at a darkness of black-hole intensity right now. All the margins are headed in the wrong direction. Kudelski pumped in a $5.4 million cash investment last year to keep the lights on; and competition over media middleware and set-top box software is only getting more bug-eyed. Even Google is rumored to be considering entering this space with an adapted version of its Android cell-phone platform.

If OpenTV has truly amazing products in its pipeline, then the company would be great acquisition fodder. But if not, it appears to be teetering on the edge of bankruptcy, and the light at the end of the tunnel is probably an oncoming caravan of 18-wheelers.

Too risky for me, especially when rival TiVo is looking so good, and there are so many more reliable ways to fire up your investments.

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