Acacia Research (ACTG) AI Stock Analysis

• Market Cap: $376.20M
• Dividend Yield: N/A
• Average Volume (3M): 146.16K
• Price to Earnings (P/E): 77.1
• Beta (1Y): 0.84
• Revenue Growth: 71.28%
• EPS Growth: -89.20%
• Country: US
• Employees: 1,036
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): -0.01
• Shares Outstanding: 96,460,380
• 10 Day Avg. Volume: 149,947
• 30 Day Avg. Volume: 146,158
• PEG Ratio: 0.08
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 3.52
• P/FCF Ratio: -4.37
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $5.00
• Price Target Upside: 30.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $4.00 ▲(4.44% Upside)

Acacia Research's overall stock score reflects strong revenue growth and a stable balance sheet, as highlighted in the earnings call. However, high valuation metrics and challenges in cash flow generation and specific market segments temper the outlook. Technical indicators suggest a neutral market sentiment, aligning with the stock's current valuation concerns.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong market demand and successful strategic initiatives, enhancing long-term business prospects.

Strong Balance Sheet

A robust balance sheet with substantial cash reserves provides financial stability and flexibility for future growth opportunities.

Positive Developments in Intellectual Property

Growth in IP revenue highlights effective monetization of patents, strengthening Acacia's competitive position in the intellectual property market.

Negative Factors

GAAP Operating Loss

The operating loss suggests ongoing challenges in achieving profitability, which could impact long-term financial health if not addressed.

Challenges in the Class 8 Truck Market

Weak demand in the Class 8 truck market could hinder revenue growth in this segment, affecting overall business performance.

Office Products Demand Uncertainty

Uncertainty in office products demand due to trade issues may lead to volatile revenue streams, impacting stability in this business area.

Acacia Research Business Overview & Revenue Model

Company Description

Acacia Research Corporation, together with its subsidiaries, invests in intellectual property and related absolute return assets; and engages in the licensing and enforcement of patented technologies. The company operates through two segments, Intellectual Property Operations and Industrial Operations. The company owns or controls the rights to various patent portfolios, which include U.S. patents and foreign counterparts covering technologies used in a range of industries. It has executed approximately 1,600 license agreements, and approximately 200 patent portfolio licensing and enforcement programs. It also designs manufactures printers and parts, and consumable products through dealers and distributors for various industrial printing applications. In addition, the company offers supply-chain printing solutions for manufacturing, transportation and logistics, retail distribution, food and beverage distribution, and pharmaceutical distribution industries; and line matrix printers for mission critical applications within labeling and inventory management, build sheets, invoicing, manifests and bills of lading, and reporting industries. Acacia Research Corporation was incorporated in 1993 and is based in New York, New York.

How the Company Makes Money

Acacia Research generates revenue primarily through licensing its patents to third parties, which often includes negotiating licensing agreements with companies that infringe on its intellectual property. The company also earns money through litigation, as it pursues legal action against entities that violate its patents, aiming for settlements or judgments in its favor. Key revenue streams include licensing fees, royalties from licensed technologies, and potential litigation settlements. Additionally, Acacia may form partnerships or joint ventures with other firms to further enhance its patent monetization efforts, contributing to its overall earnings.

Acacia Research Financial Statement Overview

Summary

Acacia Research demonstrates strong revenue growth and efficient cost management, as evidenced by its high gross profit margin. The balance sheet is stable with low leverage, but profitability metrics such as net profit margin and return on equity are areas for improvement. Cash flow generation shows some weaknesses, particularly in free cash flow growth, which could impact future financial flexibility.

Income Statement

Acacia Research shows a strong revenue growth rate of 14.58% in the TTM period, indicating a positive trajectory. The gross profit margin is robust at 70.76%, reflecting efficient cost management. However, the net profit margin is relatively low at 1.70%, suggesting limited profitability after expenses. The EBIT and EBITDA margins are moderate, indicating operational efficiency but room for improvement in profitability.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.016, indicating minimal leverage and financial stability. The return on equity is modest at 0.91%, suggesting limited returns to shareholders. The equity ratio is strong, highlighting a solid capital structure with a high proportion of equity financing.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth by -8.77%, which could pose a risk to liquidity. The operating cash flow to net income ratio is 0.82, indicating adequate cash generation relative to net income. However, the free cash flow to net income ratio is 0.67, suggesting some challenges in converting earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	283.95M	122.31M	125.10M	59.22M	88.05M	29.78M
Gross Profit	200.92M	29.65M	72.27M	21.84M	51.95M	4.96M
EBITDA	69.17M	2.85M	84.33M	-107.20M	193.26M	123.01M
Net Income	4.83M	-36.06M	67.06M	-125.06M	149.20M	109.23M
Balance Sheet
Total Assets	768.87M	756.39M	633.54M	482.93M	798.86M	511.31M
Cash, Cash Equivalents and Short-Term Investments	334.79M	333.76M	439.91M	386.14M	707.47M	451.33M
Total Debt	102.73M	124.33M	13.51M	63.88M	184.21M	117.20M
Total Liabilities	192.03M	203.78M	43.94M	213.61M	368.38M	222.99M
Stockholders Equity	537.61M	514.83M	568.27M	258.28M	419.43M	277.27M
Cash Flow
Free Cash Flow	28.18M	-98.55M	-28.70M	-43.07M	-7.76M	-33.60M
Operating Cash Flow	41.83M	50.12M	-22.51M	-37.34M	13.33M	-19.62M
Investing Cash Flow	-110.59M	-212.96M	16.18M	184.46M	35.75M	18.60M
Financing Cash Flow	10.24M	97.56M	58.63M	-166.14M	59.74M	109.21M

Acacia Research Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACTG, the sentiment is Positive. The current price of 3.83 is above the 20-day moving average (MA) of 3.73, above the 50-day MA of 3.67, and above the 200-day MA of 3.50, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 59.59 is Neutral, neither overbought nor oversold. The STOCH value of 76.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ACTG.

Acacia Research Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ACTG	63 Neutral	$376.20M	77.06	0.90%	―	71.28%	-89.20%
KODK	56 Neutral	$720.11M	-22.67	0.58%	―	-0.67%	-141.58%
QUAD	52 Neutral	$315.70M	15.07	27.91%	4.69%	-9.23%	―
NTIP	50 Neutral	$29.90M	-11.91	-5.87%	7.58%	-92.03%	-77.99%
OMEX	47 Neutral	$119.84M	-2.21	―	―	-41.55%	-249.30%
SGRP	40 Neutral	$20.62M	-0.96	-93.99%	―	-35.72%	-277.39%