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Adeia
(NASDAQ:ADEA)
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Rating:74Outperform
Price Target:
$32.00
▲(10.61% Upside)
Action:Reiterated
Date:07/01/26
The score is driven primarily by strong financial performance (high margins, robust cash generation, and significantly improved leverage). Technicals are supportive with price above major moving averages, but limited momentum data reduces confidence. Valuation is a headwind given the higher P/E and modest yield. Earnings-call takeaways are positive on guidance and licensing wins, but recurring-revenue volatility, customer dispute risk, litigation, and leadership transition risks temper the outlook; recent corporate events add incremental legal overhang.
Positive Factors
High Profitability
Sustained high margins reflect the licensing business’s scalable, low variable-cost model and pricing power over adopters of its IP. Strong operating profitability supports reinvestment, cover for litigation or renewals, and durable free cash flow generation even through top-line variability.
Negative Factors
Recurring Revenue Volatility
Large quarter‑to‑quarter swings in recurring revenue, driven by subscriber losses, renewal timing and retroactive items, undermine predictability of licensing cash flows. That variability complicates forecasting, makes meeting guidance dependent on deal timing, and raises execution risk for multi‑period targets.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability
Sustained high margins reflect the licensing business’s scalable, low variable-cost model and pricing power over adopters of its IP. Strong operating profitability supports reinvestment, cover for litigation or renewals, and durable free cash flow generation even through top-line variability.
Read all positive factors
Adeia Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyAdeia (ADEA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.26B
Dividend Yield1.17%
Average Volume (3M)2.20M
Price to Earnings (P/E)25.9
Beta (1Y)1.04
Revenue Growth21.09%
EPS Growth61.05%
CountryUS
Employees150
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.12
Shares Outstanding110,293,750
10 Day Avg. Volume1,824,415
30 Day Avg. Volume2,203,085
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)3.92
Price to Sales (P/S)4.25
P/FCF Ratio12.61
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue7.46
Enterprise Value/Gross Profit8.58
Enterprise Value/Ebitda13.55
Forecast
1Y Price Target
$37.00Price Target Upside27.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.42
Revenue Forecast (FY)$417.06M
Adeia Business Overview & Revenue Model
Company Description
Adeia Inc. is an international enterprise focused on intellectual property licensing within the consumer and entertainment sectors. Operating globally, the company licenses its proprietary innovations, marketed under the Adeia brand, to various en...
How the Company Makes Money
Adeia makes money primarily by monetizing its patent portfolio through licensing and related IP agreements. Its key revenue streams are: (1) recurring license royalties and/or fixed-fee license payments from companies that use Adeia’s patented tec...
Adeia Earnings Call Summary
Earnings Call Date:May 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial picture: strong Q1 revenue (~$105M), very high adjusted EBITDA margin (60%), robust operating cash flow (~$58.5M), significant new license wins (AMD and Microsoft), patent portfolio expansion, technology progress (RapidCool), active tuck‑in M&A, share repurchases, dividends, and an S&P upgrade. Offsetting items include a meaningful sequential decline in recurring revenue (~30% QoQ) tied to subscriber declines and timing of renewals, the loss/nonrenewal dispute with DISH, reliance in Q1 on retroactive revenue components (AMD), ongoing litigation expenses, and a planned CEO departure that introduces near‑term leadership transition risk. Management reiterated full‑year guidance and emphasized a strong pipeline, but execution on renewals and new deals is required to meet targets.Positive Updates
Strong Q1 Revenue, EBITDA and Cash Generation
Reported revenue of $104.8M (also cited as $105M), adjusted EBITDA of $62.3M and an adjusted EBITDA margin of 60%. Generated $58.5M in operating cash flow and ended the quarter with $115.8M in cash, cash equivalents and marketable securities.
Negative Updates
Significant QoQ Decline in Reported Recurring Revenue
Q1 recurring revenue was $66.3M versus $94.5M in the prior quarter, a decline of $28.2M (≈29.8% quarter‑over‑quarter). Management attributed the decline to subscriber losses, timing of renewals with certain pay TV customers, and the timing/structure of agreements with SanDisk and Kioxia (which contributed no revenue in Q1).
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Q1 Revenue, EBITDA and Cash Generation
Reported revenue of $104.8M (also cited as $105M), adjusted EBITDA of $62.3M and an adjusted EBITDA margin of 60%. Generated $58.5M in operating cash flow and ended the quarter with $115.8M in cash, cash equivalents and marketable securities.
Read all positive updates
Company Guidance
Adeia reiterated full‑year 2026 guidance of $395 million to $435 million in revenue, operating expenses of $184 million to $192 million, interest expense of $34 million to $36 million, other income of $5.5 million to $6.5 million, an expected adjusted EBITDA margin of approximately 55%, a non‑GAAP tax rate of 21%, and capital expenditures of about $2 million; management also expects quarterly recurring revenue to grow through the year to roughly $90 million by year‑end and said H1 and H2 should be roughly equal in revenue contribution (with Q2 modestly lower than Q1).Adeia Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 460.49M | 443.39M | 376.02M | 388.79M | 438.93M | 877.70M |
| Gross Profit | 400.56M | 386.76M | 303.25M | 293.51M | 324.71M | 523.74M |
| EBITDA | 253.67M | 239.86M | 206.50M | 237.82M | 269.33M | 235.64M |
| Net Income | 122.03M | 111.08M | 64.62M | 67.37M | -295.88M | -55.46M |
Balance Sheet | ||||||
| Total Assets | 1.00B | 1.04B | 1.10B | 1.11B | 1.21B | 2.47B |
| Cash, Cash Equivalents and Short-Term Investments | 115.76M | 136.73M | 110.39M | 83.57M | 114.56M | 140.96M |
| Total Debt | 29.52M | 435.92M | 485.42M | 595.93M | 736.29M | 772.87M |
| Total Liabilities | 535.82M | 558.76M | 701.39M | 748.93M | 909.11M | 1.13B |
| Stockholders Equity | 466.57M | 480.54M | 396.57M | 356.62M | 301.41M | 1.35B |
Cash Flow | ||||||
| Free Cash Flow | 150.35M | 149.33M | 190.16M | 146.41M | 170.16M | 220.65M |
| Operating Cash Flow | 159.44M | 158.09M | 212.46M | 152.75M | 183.02M | 234.79M |
| Investing Cash Flow | -38.98M | -40.26M | -24.02M | -34.49M | -2.91M | -6.21M |
| Financing Cash Flow | -151.32M | -123.51M | -164.17M | -178.26M | -263.26M | -196.25M |
Adeia Technical Analysis
Neutral
28.93
Price Trends
30.12
Negative
27.13
Positive
21.57
Positive
Market Momentum
-0.25
Positive
44.75
Neutral
28.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADEA, the sentiment is Neutral. The current price of 28.93 is below the 20-day moving average (MA) of 30.87, below the 50-day MA of 30.12, and above the 200-day MA of 21.57, indicating a neutral trend. The MACD of -0.25 indicates Positive momentum. The RSI at 44.75 is Neutral, neither overbought nor oversold. The STOCH value of 28.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ADEA.
Adeia Risk Analysis
Adeia disclosed 39 risk factors in its most recent earnings report. Adeia reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Adeia Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.26B | 25.89 | 27.68% | 1.17% | 21.09% | 61.05% | |
70 Outperform | $1.58B | 18.21 | 17.82% | ― | 15.50% | 56.73% | |
64 Neutral | $1.66B | -100.34 | 32.36% | ― | 13.03% | 7.07% | |
64 Neutral | $1.29B | 47.65 | 5.25% | ― | 8.10% | -73.21% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $690.46M | -8.92 | -9.11% | ― | 23.94% | -630.81% |
* Technology Sector Average
ADEA
Adeia
28.98
14.59
101.38%
PAR
Par Technology
16.88
-52.08
-75.52%
PRGS
Progress Software
37.86
-10.94
-22.42%
PRCH
Porch Group
14.85
2.47
19.95%
CXM
Sprinklr
5.48
-3.20
-36.87%
Adeia Corporate Events
Legal Proceedings
Adeia Files Patent Infringement Lawsuit Against FuboTV
Negative
Jul 1, 2026
On July 1, 2026, Adeia announced that a wholly owned subsidiary filed a patent infringement lawsuit against FuboTV Inc. and certain subsidiaries in the U.S. District Court for the District of Delaware. The complaint alleges infringement of four U....
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
Adeia Shareholders Approve Governance, Compensation and Equity Plan
Positive
May 8, 2026
At its annual meeting held on May 7, 2026, Adeia stockholders re-elected seven directors to serve until the next annual meeting and approved, on an advisory basis, the compensation of the company’s named executive officers. Investors also ra...
Business Operations and StrategyExecutive/Board Changes
Adeia CEO Paul Davis Plans 2026 Leadership Transition
Neutral
May 4, 2026
Adeia Inc. announced on May 4, 2026, that chief executive officer Paul E. Davis intends to step down from his roles as CEO and board member by the fourth quarter of 2026 to prioritize his health and personal pursuits, though he will remain in plac...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.