Adeia (ADEA) AI Stock Analysis

• Market Cap: $2.16B
• Dividend Yield: 1.17%
• Average Volume (3M): 724.82K
• Price to Earnings (P/E): 18.7
• Beta (1Y): 1.23
• Revenue Growth: 10.53%
• EPS Growth: 76.90%
• Country: US
• Employees: 150
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.86
• Shares Outstanding: 109,510,190
• 10 Day Avg. Volume: 643,441
• 30 Day Avg. Volume: 724,818
• PEG Ratio: 0.11
• Price to Book (P/B): 3.92
• Price to Sales (P/S): 4.25
• P/FCF Ratio: 12.05
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 5.08
• Enterprise Value/Gross Profit: -8.22
• Enterprise Value/Ebitda: 9.48
• 1Y Price Target: $26.75
• Price Target Upside: 44.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.41
• Revenue Forecast (FY): $409.47M

• Rating: 65 Neutral
• Price Target: $20.00 ▲(8.23% Upside)
• Action: Reiterated Date: 02/24/26
• Date: Action: Reiterated 02/24/26

The score is primarily supported by improved financial risk (material deleveraging) and strong ongoing cash generation, plus constructive technical trend. It’s held back by mixed earnings quality signals in the financial statements (notably negative gross profit/weak EBITDA), relatively expensive valuation, and 2026 guidance that implies margin compression and elevated litigation-related uncertainty.

Positive Factors

Balance Sheet Strength

Material deleveraging in 2025 left Adeia conservatively financed with very low debt-to-equity, providing durable financial flexibility. Low leverage supports continued R&D, deal-making, buybacks and dividend policy and cushions the business against cyclical revenue swings.

Cash Generation & Conversion

High operating cash flow and near-dollar free cash flow conversion (~99% of earnings) demonstrate a persistent ability to convert licensing revenues into cash. This supports recurring shareholder returns, small tuck-in M&A and sustained investment in patenting and product development over the medium term.

Diversified Licensing & Patent Growth

Shift toward OTT, semiconductors and other non‑Pay‑TV licensing plus a growing patent base diversifies revenue sources. Record new customers and semiconductor traction (40% YoY growth) expand addressable markets and reduce reliance on legacy pay-TV licensing over the medium term.

Negative Factors

Litigation & Legal Expense

Elevated and rising litigation costs reflect active disputes (DIRECTV, AMD, others) and create ongoing earnings volatility. Legal outcomes can impose settlements or injunctions, strain management focus and raise recurring expense levels, making margins and cash flow harder to predict over the coming quarters.

Earnings Quality — Gross Profit & EBITDA Weakness

A negative gross profit and marginal EBITDA in 2025 versus a strong net margin signal accounting, timing or one-off effects that undermine core profitability visibility. This raises risk that reported net income and margins may be less repeatable, complicating forecasting and long-term margin sustainability assessments.

Guidance Implies Margin Compression & Transition Risk

Management's 2026 guidance signals notable margin compression driven by higher litigation and operating expenses and an anticipated shift away from historically higher‑margin Pay‑TV revenue. The transition in revenue mix and potential lower 2026 top line at the low end increases execution and timing risk for sustainable margins.

Adeia Business Overview & Revenue Model

Company Description

Adeia Inc., together with its subsidiaries, operates as a consumer and entertainment product/solutions licensing company worldwide. It licenses its innovations to companies in the entertainment industry under the Adeia brand. The company licenses its patent portfolios across various markets, including multichannel video programming distributors comprising cable, satellite, and telecommunications television providers that aggregate and distribute linear content over networks, as well as television providers that aggregate and stream linear content over broadband networks; over-the-top video service providers, social media, and other new media companies, such as subscription video-on-demand service providers and social media companies; consumer electronics manufacturers, which includes smart televisions, streaming media devices, video game consoles, mobile devices, DVRs, and other connected media devices; and semiconductors, including sensors, radio frequency components, memory, and logic devices. The company was incorporated in 2019 and is headquartered in San Jose, California.

How the Company Makes Money

Adeia generates revenue primarily through the licensing of its extensive portfolio of patents and technologies to industry leaders in telecommunications, media, and consumer electronics. The company charges licensing fees for the use of its patented technologies in products and services, which can include everything from streaming services to advanced telecommunications systems. Additionally, Adeia may engage in partnerships with other technology firms to co-develop products or technologies, creating shared revenue opportunities. By continuously innovating and filing new patents, Adeia enhances its revenue potential while capitalizing on trends in digital transformation and content consumption.

Adeia Financial Statement Overview

Summary

Balance sheet is a clear strength after major deleveraging (very low debt-to-equity), and cash generation remains solid with strong operating cash flow/free cash flow and good cash conversion. Offsetting this, operating/earnings quality signals are mixed: 2025 shows negative gross profit and slightly negative EBITDA despite strong net margin, raising sustainability questions.

Income Statement

Revenue has been volatile over the period, with sizable declines in 2021–2023 followed by a rebound in 2024 and solid growth in 2025 (+9.8%). Profitability improved meaningfully versus the 2021–2022 losses, with 2025 showing a strong net margin (~26%). However, 2025 shows a sharp deterioration in gross profitability (negative gross profit and margin) and very weak EBITDA (slightly negative), which is a major quality-of-earnings red flag versus prior years’ consistently strong gross margins.

Balance Sheet

The balance sheet strengthened dramatically in 2025, with debt reduced to ~30M and leverage falling to very low levels (debt-to-equity ~0.06) versus elevated leverage in 2022–2024. Equity increased and the company now appears conservatively financed. The main watch item is the large year-to-year swing in leverage and capital structure, suggesting recent balance-sheet actions (repayment/refinancing) that may not represent a steady-state profile.

Cash Flow

Cash generation remains a clear positive: operating cash flow and free cash flow are both strong in 2025 (~158M and ~156M), and free cash flow closely matches reported earnings (about 99%), indicating good cash conversion. That said, free cash flow declined in 2025 (about -18.5% growth), and operating cash flow coverage versus net income fell versus 2024, pointing to weaker near-term cash flow momentum despite still-healthy levels.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	417.02M	376.02M	388.79M	438.93M	877.70M
Gross Profit	-257.84M	303.25M	293.51M	324.71M	523.74M
EBITDA	-1.38M	206.50M	237.82M	269.33M	235.64M
Net Income	111.08M	64.62M	67.37M	-295.88M	-55.46M
Balance Sheet
Total Assets	1.04B	1.10B	1.11B	1.21B	2.47B
Cash, Cash Equivalents and Short-Term Investments	136.73M	110.39M	83.57M	114.56M	140.96M
Total Debt	29.71M	485.42M	595.93M	736.29M	772.87M
Total Liabilities	558.76M	701.39M	748.93M	909.11M	1.13B
Stockholders Equity	480.54M	396.57M	356.62M	301.41M	1.35B
Cash Flow
Free Cash Flow	156.28M	210.64M	146.41M	170.16M	220.65M
Operating Cash Flow	158.09M	212.46M	152.75M	183.02M	234.79M
Investing Cash Flow	-40.26M	-24.02M	-34.49M	-2.91M	-6.21M
Financing Cash Flow	-123.51M	-164.17M	-178.26M	-263.26M	-196.25M

Adeia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADEA, the sentiment is Positive. The current price of 18.48 is above the 20-day moving average (MA) of 18.46, above the 50-day MA of 17.53, and above the 200-day MA of 15.17, indicating a bullish trend. The MACD of 0.26 indicates Positive momentum. The RSI at 51.57 is Neutral, neither overbought nor oversold. The STOCH value of 42.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADEA.

Adeia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXM	73 Outperform	$1.30B	12.51	21.35%	―	6.48%	168.94%
PRGS	67 Neutral	$1.73B	24.56	15.95%	―	31.41%	-40.89%
ADEA	65 Neutral	$2.16B	18.67	18.53%	1.17%	10.53%	76.90%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
PRCH	56 Neutral	$781.26M	-169.59	―	―	-2.13%	―
PAR	47 Neutral	$804.11M	-8.80	-11.64%	―	13.49%	-772.30%

Adeia Corporate Events

Adeia Reshapes Executive Team to Sharpen Semiconductor Focus

On January 26, 2026, Adeia expanded and reshaped its executive leadership team to reinforce its long-term growth strategy and sharpen its semiconductor focus. The company appointed Craig Mitchell as chief semiconductor officer to lead semiconductor technology research and development and guide its long-term technology roadmap, while creating two new senior roles: chief revenue officer, filled by Dr. Mark Kokes to oversee global sales, IP portfolio management and revenue generation, and chief strategy officer, filled by Bill Thomas to drive corporate strategy, market analysis and growth initiatives. As part of the reorganization, Adeia also announced that Dana Escobar, chief licensing officer and general manager for the semiconductor segment, will transition out and plans to depart the company on March 13, 2026, reflecting a broader move to align deep technical leadership with an integrated revenue engine and unified strategic framework aimed at strengthening execution and expanding the impact of its IP portfolio across global markets.

The most recent analyst rating on (ADEA) stock is a Buy with a $22.50 price target. To see the full list of analyst forecasts on Adeia stock, see the ADEA Stock Forecast page.

Adeia Ups 2025 Outlook on Strong Disney-Driven Deals

On December 22, 2025, Adeia Inc. raised its financial outlook for the year ending December 31, 2025, projecting revenue of $425 million to $435 million, up from a prior range of $360 million to $380 million, with GAAP net income now expected between $96.4 million and $113.9 million and non-GAAP net income between $169.8 million and $175.9 million. Management attributed the stronger guidance primarily to robust deal execution, led by a key agreement with Disney, and indicated that higher operating expenses largely reflect greater variable compensation tied to outperformance, underscoring management’s confidence in the company’s business momentum and earnings potential heading into year-end 2025.

The most recent analyst rating on (ADEA) stock is a Hold with a $15.00 price target. To see the full list of analyst forecasts on Adeia stock, see the ADEA Stock Forecast page.