William Blair analyst Arjun Bhatia has maintained their bullish stance on IDCC stock, giving a Buy rating on July 28.
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Arjun Bhatia has given his Buy rating due to a combination of factors, primarily centered around InterDigital’s new licensing agreement with Samsung. This agreement, valued at $1.05 billion over eight years, represents a significant increase in recurring revenue compared to the previous deal, marking a 67% rise to $131 million annually. This substantial uplift surpasses investor expectations, which were previously aligned with InterDigital’s smaller increase from their last agreement with Apple.
Additionally, the estimated royalty rate for Samsung under this new agreement is notably high, at $0.59 per unit, which is the highest on record for InterDigital. This rate is significantly above the rates for other major partners like Apple and Vivo. The retroactive nature of the deal also means that InterDigital anticipates a considerable catch-up revenue boost, expected to be recognized in the second quarter of 2025, further enhancing the company’s financial outlook. These factors collectively underpin Bhatia’s positive outlook and Buy rating for InterDigital’s stock.
In another report released on July 28, Sidoti also maintained a Buy rating on the stock with a $256.00 price target.