Adeia (ADEA) AI Stock Analysis

• Market Cap: $1.43B
• Dividend Yield: 1.48%
• Average Volume (3M): 590.12K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 1.09
• Revenue Growth: 7.16%
• EPS Growth: 89.18%
• Country: US
• Employees: 150
• Sector: Technology
• Sector Strength: 65
• Industry: Software - Application
• EPS (TTM): 0.26
• Shares Outstanding: 108,444,910
• 10 Day Avg. Volume: 414,518
• 30 Day Avg. Volume: 590,119
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.09
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $18.33
• Price Target Upside: 37.41% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Adeia's overall stock score reflects strong profitability and cash management, tempered by revenue decline and asset management challenges. Technical analysis shows mixed signals, while valuation remains fair. The earnings call and corporate events provide some optimism, though litigation and market challenges pose risks. The score suggests a cautious but slightly positive outlook.

Positive Factors

Financial Health

Debt reduction is a positive sign for financial health and future stability.

Licensing Momentum

Licensing momentum continues, showing ongoing demand for the company's offerings.

Operational Performance

EBITDA beat despite a slight revenue miss indicates strong operational performance.

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.

Revenue Concerns

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

Tariff Concerns

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.

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 through a robust licensing model, primarily by developing and holding a broad portfolio of intellectual property and technology patents. The company generates revenue by licensing these patents to other tech companies and manufacturers, allowing them to incorporate Adeia's proprietary technologies into their products and services. This model not only provides a steady stream of licensing fees but also incentivizes innovation and the development of new technologies. Key revenue streams include long-term licensing agreements, royalties, and strategic partnerships with leading technology firms, which help expand its reach and ensure continued income from its intellectual property assets.

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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
376.02M	388.79M	438.93M	877.70M	892.02M
	Gross Profit
303.25M	388.79M	324.71M	750.94M	813.66M
	EBIT
128.61M	136.23M	153.06M	28.09M	177.63M
	EBITDA
206.50M	237.82M	269.33M	235.64M	348.53M
	Net Income Common Stockholders
64.62M	67.37M	138.39M	-58.91M	146.76M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
110.39M	83.57M	114.56M	261.65M	257.13M
	Total Assets
1.10B	1.11B	1.21B	2.47B	2.70B
	Total Debt
485.42M	595.93M	734.19M	820.14M	905.59M
	Net Debt
406.59M	541.37M	619.63M	619.02M	735.40M
	Total Liabilities
701.39M	748.93M	909.11M	1.13B	1.25B
	Stockholders Equity
396.57M	356.62M	301.41M	1.35B	1.46B
Cash Flow		Free Cash Flow
210.64M	146.41M	170.16M	220.65M	369.29M
	Operating Cash Flow
212.46M	152.75M	183.02M	234.79M	427.60M
	Investing Cash Flow
-24.02M	-34.49M	-2.91M	-6.21M	17.84M
	Financing Cash Flow
-164.17M	-178.26M	-263.26M	-196.25M	-351.14M

Adeia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.34
• 50DMA: Positive
• 100DMA: Negative
• 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 13.34 is above the 20-day moving average (MA) of 12.37, above the 50-day MA of 13.13, and above the 200-day MA of 12.68, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 58.84 is Neutral, neither overbought nor oversold. The STOCH value of 83.46 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	76 Outperform	$1.35B	11.31	19.18%	6.42%	8.07%	―
SEMR	72 Outperform	$1.54B	187.88	2.81%	―	22.75%	-47.45%
SPT	66 Neutral	$1.21B	―	-36.95%	―	17.79%	16.49%
AMPL	66 Neutral	$1.24B	―	-32.87%	―	8.56%	-4.21%
ADEA	63 Neutral	$1.43B	18.64	20.43%	1.48%	7.16%	89.18%
Sector *	60 Neutral	$10.96B	10.28	-6.73%	2.97%	7.74%	-12.45%
MLNK	57 Neutral	$1.27B	―	-6.36%	―	4.18%	27.11%

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.

Spark’s Take on ADEA Stock

According to Spark, TipRanks’ AI Analyst, ADEA is a Neutral.

Adeia’s overall stock score reflects a balance of strengths and challenges. The company exhibits strong profitability margins and effective cash management but faces declining revenues and potential asset management issues. Technical analysis suggests mixed signals, with some indicators pointing to potential resistance. Valuation is fair, considering the P/E ratio and dividend yield. Positive guidance and strategic growth focus from the earnings call provide optimism, despite litigation and market challenges. The stock score suggests a cautious but positive outlook, with key risks being revenue decline and market conditions.

To see Spark’s full report on ADEA stock, click here.