Adeia (ADEA) AI Stock Analysis

• Market Cap: $1.32B
• Dividend Yield: 1.4%
• Average Volume (3M): 851.33K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 1.27
• Revenue Growth: 10.53%
• EPS Growth: 76.90%
• Country: US
• Employees: 150
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.28
• Shares Outstanding: 109,510,190
• 10 Day Avg. Volume: 921,273
• 30 Day Avg. Volume: 851,326
• PEG Ratio: -3.70
• Price to Book (P/B): 3.83
• Price to Sales (P/S): 4.04
• P/FCF Ratio: 7.21
• Enterprise Value/Market Cap: 1.69
• Enterprise Value/Revenue: 5.87
• Enterprise Value/Gross Profit: 6.93
• Enterprise Value/Ebitda: 11.85
• 1Y Price Target: $19.75
• Price Target Upside: 64.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.23
• Revenue Forecast (FY): $375.50M

• Rating: 65 Neutral
• Price Target: $15.00 ▲(24.58% Upside)

Adeia's overall stock score reflects strong financial performance and strategic growth initiatives, tempered by bearish technical indicators and litigation risks. The company's robust cash flow and profitability are significant strengths, but the ongoing legal challenges and adjusted revenue guidance due to litigation with AMD present notable risks. The valuation is reasonable but not compelling in the current market context.

Positive Factors

Non-Pay TV Revenue Growth

Strong growth in non-Pay TV revenue indicates successful diversification into new verticals, enhancing long-term revenue stability and market reach.

Patent Portfolio Expansion

Expanding patent portfolio strengthens competitive advantage and supports future licensing revenue, crucial for sustained growth in tech-driven markets.

Debt Reduction

Continued debt reduction enhances financial flexibility and reduces interest burden, improving long-term financial health and investment capacity.

Negative Factors

Litigation Against AMD

Ongoing litigation with AMD poses financial and operational risks, potentially affecting revenue and diverting resources from growth initiatives.

Adjusted Revenue Guidance

Reduced revenue guidance reflects challenges in securing key agreements, impacting short-term financial targets and investor confidence.

Increased Litigation Expenses

High litigation expenses can strain financial resources, limiting investment in growth areas and potentially affecting profitability margins.

Adeia Business Overview & Revenue Model

Company Description

Adeia (ADEA) is a technology company specializing in the development of innovative solutions for the media and entertainment sectors. The company focuses on providing intellectual property and licensing services, with a strong emphasis on enhancing consumer experiences through advanced technologies. Adeia's core products include patents and licensing related to digital content delivery, user interface enhancements, and data management systems, aimed at driving efficiency and engagement in media consumption.

How the Company Makes Money

Adeia generates revenue primarily through licensing agreements for its extensive portfolio of patents and intellectual property. The company monetizes its innovations by partnering with various media and technology firms that seek to leverage Adeia's patented technologies in their products and services. Key revenue streams include upfront licensing fees, ongoing royalties from licensees based on product sales or usage, and strategic collaborations with industry leaders to co-develop new technologies. Adeia's ability to secure high-value partnerships in the rapidly evolving media landscape also contributes significantly to its earnings.

Adeia Financial Statement Overview

Summary

Adeia demonstrates strong financial performance with robust profitability and cash flow generation. The company shows impressive revenue and free cash flow growth, although the balance sheet indicates a moderate level of leverage.

Income Statement

Adeia's income statement shows strong profitability with a high EBIT margin of 34.52% and a net profit margin of 22.15% in the TTM period. The company has demonstrated a significant revenue growth rate of 32.7% in the TTM, indicating a positive growth trajectory. However, the gross profit margin is unusually high at 100%, suggesting potential data discrepancies or unique revenue recognition practices.

Balance Sheet

The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 1.14, indicating a manageable level of leverage. Return on equity is strong at 21.41%, showcasing effective use of equity. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing.

Cash Flow

Adeia's cash flow statement is robust, with a free cash flow growth rate of 147.4% in the TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 2.33 indicates efficient cash conversion. The free cash flow to net income ratio is high at 93.55%, demonstrating strong cash profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	379.91M	376.02M	388.79M	438.93M	877.70M	892.02M
Gross Profit	321.55M	303.25M	293.51M	324.71M	523.74M	638.92M
EBITDA	188.02M	206.50M	237.82M	269.33M	235.64M	348.53M
Net Income	73.39M	64.62M	67.37M	-295.88M	-55.46M	146.76M
Balance Sheet
Total Assets	1.07B	1.10B	1.11B	1.21B	2.47B	2.70B
Cash, Cash Equivalents and Short-Term Investments	115.07M	110.39M	83.57M	114.56M	140.96M	257.13M
Total Debt	447.60M	485.42M	595.93M	736.29M	772.87M	923.49M
Total Liabilities	654.95M	701.39M	748.93M	909.11M	1.13B	1.25B
Stockholders Equity	413.72M	396.57M	356.62M	301.41M	1.35B	1.46B
Cash Flow
Free Cash Flow	191.78M	210.64M	146.41M	170.16M	220.65M	369.29M
Operating Cash Flow	205.55M	212.46M	152.75M	183.02M	234.79M	427.60M
Investing Cash Flow	-50.00M	-24.02M	-34.49M	-2.91M	-6.21M	17.84M
Financing Cash Flow	-160.15M	-164.17M	-178.26M	-263.26M	-196.25M	-351.14M

Adeia Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADEA, the sentiment is Negative. The current price of 12.04 is below the 20-day moving average (MA) of 14.22, below the 50-day MA of 15.70, and below the 200-day MA of 14.23, indicating a bearish trend. The MACD of -1.14 indicates Positive momentum. The RSI at 29.59 is Positive, neither overbought nor oversold. The STOCH value of 6.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADEA.

Adeia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXM	73 Outperform	$1.74B	15.75	23.74%	―	6.08%	153.79%
PRGS	69 Neutral	$1.74B	36.96	10.75%	―	31.41%	-40.89%
MLNK	66 Neutral	―	―	-5.41%	―	5.96%	50.29%
ADEA	65 Neutral	$1.32B	18.55	18.53%	1.40%	10.53%	76.90%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
PRCH	56 Neutral	$960.46M	37.36	―	―	-2.13%	―
PAR	48 Neutral	$1.36B	―	-11.64%	―	13.49%	-772.30%

Adeia Corporate Events

Adeia Inc. Navigates Growth Amid Legal Challenges

Adeia Inc. recently held its third-quarter earnings call, revealing a mixed sentiment among investors and analysts. The company reported robust growth in non-Pay TV revenue and secured new license agreements, which were positive highlights. However, the impact of ongoing litigation against AMD and the subsequent adjustment in revenue guidance tempered the overall positive performance. Despite these challenges, Adeia’s strategic initiatives in expanding its patent portfolio and reducing debt were commendable, although legal issues present potential risks.

Adeia Inc. Reports Strong Q3 2025 Results

Adeia Inc. is a prominent research and development and intellectual property licensing company that plays a crucial role in the media and semiconductor industries by promoting the adoption of innovative technologies.