Adeia (ADEA) AI Stock Analysis

• Market Cap: $1.36B
• Dividend Yield: 1.45%
• Average Volume (3M): 516.58K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 1.04
• Revenue Growth: 5.47%
• EPS Growth: 78.91%
• Country: US
• Employees: 150
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Application
• EPS (TTM): 0.25
• Shares Outstanding: 108,499,855
• 10 Day Avg. Volume: 490,746
• 30 Day Avg. Volume: 516,577
• 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: 1.42
• Enterprise Value/Revenue: 5.09
• Enterprise Value/Gross Profit: 9.39
• Enterprise Value/Ebitda: 10.22
• 1Y Price Target: $19.75
• Price Target Upside: 43.32% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 63 Neutral
• Price Target: $14.50 ▲(5.22% Upside)

Adeia's overall stock score reflects a balance of strong profitability and fair valuation, tempered by concerns over declining revenue and high leverage. The positive earnings call and corporate events provide some optimism, but technical indicators suggest caution.

Positive Factors

Financial Health

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

Innovation

ADEA revealed RapidCool technology that could help reduce the heat from semiconductors running in high computational environments.

New Agreements

The company secured 5 license deals including 3 with new customers, highlighting multiple opportunities to achieve its revenue guidance.

Negative Factors

Estimates Reduction

2Q estimates are trimmed for Adeia Inc. due to deal timing.

Litigation Costs

Litigation costs reached a multi-year-high, impacting financial performance negatively.

Uncertainty in Licensing

There has been no success in signing a large license that has been in the pipeline for the past year.

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 performance is mixed. Strong profitability metrics are overshadowed by declining revenue and high leverage. Efficient cost management and cash conversion are positives, but revenue growth and debt management need attention.

Income Statement

Adeia's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a strong EBIT margin of 36.16% and a net profit margin of 19.86%, reflecting good profitability. However, the revenue growth rate is negative, indicating a decline in revenue over the period. The gross profit margin remains high, suggesting efficient cost management, but the overall revenue decline is a concern.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.20 in the TTM, indicating significant leverage, which could pose financial risks. The return on equity is healthy at 19.83%, showing effective use of equity to generate profits. However, the equity ratio is not explicitly provided, which limits a full assessment of asset financing stability.

Cash Flow

Cash flow analysis shows a slight decline in free cash flow growth at -6.1% in the TTM, but the operating cash flow to net income ratio is strong at 2.26, indicating good cash generation relative to net income. The free cash flow to net income ratio is also robust at 0.93, suggesting efficient cash conversion, despite the recent decline in free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	378.67M	376.02M	388.79M	438.93M	877.70M	515.92M
Gross Profit	205.27M	376.02M	388.79M	324.71M	391.21M	813.66M
EBITDA	188.56M	206.50M	237.82M	315.49M	351.50M	437.11M
Net Income	83.88M	64.62M	67.37M	-295.88M	-55.46M	146.76M
Balance Sheet
Total Assets	1.08B	1.10B	1.11B	1.21B	2.47B	2.70B
Cash, Cash Equivalents and Short-Term Investments	116.48M	110.39M	83.57M	114.56M	140.96M	257.13M
Total Debt	457.85M	485.42M	595.93M	736.29M	820.14M	923.49M
Total Liabilities	679.98M	701.39M	748.93M	909.11M	1.13B	1.25B
Stockholders Equity	402.92M	396.57M	356.62M	301.41M	1.35B	1.46B
Cash Flow
Free Cash Flow	189.00M	210.64M	146.41M	170.16M	220.65M	369.29M
Operating Cash Flow	202.03M	212.46M	152.75M	183.02M	234.79M	427.60M
Investing Cash Flow	-21.94M	-24.02M	-34.49M	-2.91M	-6.21M	17.84M
Financing Cash Flow	-162.29M	-164.17M	-178.26M	-263.26M	-196.25M	-351.14M

Adeia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.78
• 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 13.78 is above the 20-day moving average (MA) of 13.53, above the 50-day MA of 13.64, and above the 200-day MA of 13.26, indicating a bullish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 54.60 is Neutral, neither overbought nor oversold. The STOCH value of 52.06 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
UPBD	73 Outperform	$1.25B	12.01	15.93%	7.04%	7.49%	84.67%
MLNK	65 Neutral	$1.26B	―	-6.49%	―	5.15%	28.27%
SPT	63 Neutral	$936.34M	―	-32.50%	―	14.79%	27.52%
ADEA	63 Neutral	$1.36B	16.82	22.01%	1.45%	5.47%	78.91%
AMPL	60 Neutral	$1.60B	―	-33.99%	―	8.56%	-4.21%
Sector *	57 Neutral	HK$14.13B	9.47	-2.83%	4.86%	9.29%	-48.65%
SEMR	56 Neutral	$1.08B	182.58	-0.50%	―	22.16%	-107.92%

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.