Adeia (ADEA) AI Stock Analysis

• Market Cap: $1.55B
• Dividend Yield: 1.45%
• Average Volume (3M): 459.22K
• Price to Earnings (P/E): 20.8
• Beta (1Y): 1.06
• Revenue Growth: 7.16%
• EPS Growth: 89.18%
• Country: US
• Employees: 150
• Sector: Technology
• Sector Strength: 89
• Industry: Software - Application
• EPS (TTM): 0.26
• Shares Outstanding: 108,499,855
• 10 Day Avg. Volume: 556,886
• 30 Day Avg. Volume: 459,216
• PEG Ratio: 1.18
• Price to Book (P/B): 3.81
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.88
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 1.29
• Enterprise Value/Gross Profit: 5.13
• Enterprise Value/Ebitda: 2.37
• 1Y Price Target: $19.50
• Price Target Upside: 36.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 68 Neutral
• Price Target: $15.00 ▲(5.34%Upside)

Adeia's stock is supported by a strong earnings call, reflecting positive growth prospects and strategic initiatives. While financial performance shows profitability, challenges in revenue growth and increasing litigation costs need attention. Technical indicators are favorable, suggesting upward momentum, and valuation metrics are reasonable. Corporate events are positive but have a minimal direct impact on the stock score.

Positive Factors

Financial Health

Debt reduced, showing financial responsibility and stability for Adeia Inc.

Licensing Momentum

Licensing momentum continues, indicating strong potential for future revenue growth.

Operational Performance

EBITDA beat expectations, suggesting efficient management and operational success for Adeia Inc.

Negative Factors

Litigation Costs

Litigation costs rose to $5.9M, from $2.9M in 1Q24 following November 2024 patent infringement lawsuits against the Walt Disney Company.

Market Sell-off

Adeia (ADEA) has been swept up in the latest market selling as fears related to tariffs have taken hold even though ADEA generates its revenue from long-term agreements.

Revenue Concerns

There was a slight revenue miss, which may cause concern about the company's immediate income.

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 makes money primarily through licensing agreements and royalties derived from its extensive portfolio of patents. The company enters into agreements with various technology firms, allowing them to utilize Adeia's patented technologies in their products and services. Key revenue streams include licensing fees, which are typically structured as upfront payments, ongoing royalties based on product sales, or a combination of both. Significant partnerships with major players in the technology and media sectors also contribute to Adeia's earnings, as these collaborations often lead to lucrative, long-term licensing deals. Additionally, the company may engage in strategic litigation to enforce its patents and ensure fair compensation for the use of its intellectual property.

Adeia Financial Statement Overview

Summary

Adeia's financial statements reveal a company with robust profitability margins and efficient cash flow management, but facing challenges in revenue growth and asset management. Despite a strong operational base, declining revenues and negative growth trends could pose future risks. The balance sheet remains stable with low leverage, yet decreasing equity could impact future financial flexibility.

Income Statement

Adeia's income statement reflects a mixed performance with a declining revenue trend over recent years. The TTM gross profit margin is robust at 90.81%, indicating efficient cost management. However, revenue has decreased significantly from previous years, with a negative growth rate from 2020 to 2025. The TTM net profit margin stands at 19.86%, showing profitability despite the revenue decline. EBIT and EBITDA margins are healthy at 35.85% and 48.94%, respectively, showcasing strong operational efficiency.

Balance Sheet

The balance sheet reveals a moderate financial position with a stable debt-to-equity ratio of 0.08 in TTM, reflecting low leverage. TTM ROE is 19.39%, indicating decent returns on equity. The equity ratio is 35.82%, suggesting a balanced capital structure, though lower than previous years due to declining total assets and stockholders' equity.

Cash Flow

Adeia's cash flow statement shows strong free cash flow generation in TTM with a slight decline from the previous period. The operating cash flow to net income ratio is 2.68, indicating robust cash generation capability. Free cash flow to net income ratio is 2.50, highlighting effective cash management. However, the free cash flow growth rate is negative, suggesting potential challenges in maintaining past growth levels.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	380.29M	376.02M	388.79M	438.93M	877.70M	515.92M
Gross Profit	365.83M	303.25M	388.79M	324.71M	391.21M	813.66M
EBITDA	201.20M	206.50M	237.82M	315.49M	351.50M	437.11M
Net Income	75.54M	64.62M	67.37M	-295.88M	-55.46M	146.76M
Balance Sheet
Total Assets	1.09B	1.10B	1.11B	1.21B	2.47B	2.70B
Cash, Cash Equivalents and Short-Term Investments	116.50M	110.39M	83.57M	114.56M	140.96M	257.13M
Total Debt	468.82M	485.42M	595.93M	736.29M	820.14M	923.49M
Total Liabilities	697.59M	701.39M	748.93M	909.11M	1.13B	1.25B
Stockholders Equity	389.47M	396.57M	356.62M	301.41M	1.35B	1.46B
Cash Flow
Free Cash Flow	189.12M	210.64M	146.41M	170.16M	220.65M	369.29M
Operating Cash Flow	202.37M	212.46M	152.75M	183.02M	234.79M	427.60M
Investing Cash Flow	-19.21M	-24.02M	-34.49M	-2.91M	-6.21M	17.84M
Financing Cash Flow	-157.00M	-164.17M	-178.26M	-263.26M	-196.25M	-351.14M

Adeia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 14.24 is above the 20-day moving average (MA) of 13.42, above the 50-day MA of 13.02, and above the 200-day MA of 12.96, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 62.57 is Neutral, neither overbought nor oversold. The STOCH value of 86.93 is Negative, 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
UPBD	77 Outperform	$1.42B	11.49	19.18%	6.36%	8.07%	―
ADEA	68 Neutral	$1.55B	20.75	20.43%	1.45%	7.16%	89.18%
SPT	66 Neutral	$1.18B	―	-36.95%	―	17.79%	16.49%
SEMR	63 Neutral	$1.31B	195.27	2.81%	―	22.75%	-47.45%
MLNK	63 Neutral	$1.24B	―	-6.49%	―	5.15%	28.27%
AMPL	63 Neutral	$1.58B	―	-32.87%	―	8.56%	-4.21%
Sector *	63 Neutral	$32.90B	6.03	-11.70%	1.95%	5.55%	-19.87%

Adeia Corporate Events

Adeia Announces Key Approvals at Annual Meeting

At the 2025 Annual Meeting of Stockholders held on May 8, 2025, Adeia Inc. announced the approval of several key proposals. These included the election of seven board members, an advisory vote on executive compensation, and the ratification of PricewaterhouseCoopers LLP as the independent auditor for the fiscal year ending December 31, 2025. These decisions are likely to impact the company’s governance and financial oversight, reflecting stockholder confidence in the current leadership and strategic direction.