InterDigital (IDCC) AI Stock Analysis

• Market Cap: $8.96B
• Dividend Yield: 0.66%
• Average Volume (3M): 269.83K
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.69
• Revenue Growth: 28.75%
• EPS Growth: 85.06%
• Country: US
• Employees: 430
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.93
• Shares Outstanding: 25,744,553
• 10 Day Avg. Volume: 260,684
• 30 Day Avg. Volume: 269,828
• PEG Ratio: 0.18
• Price to Book (P/B): 5.72
• Price to Sales (P/S): 5.65
• P/FCF Ratio: 18.47
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 12.14
• Enterprise Value/Gross Profit: 13.46
• Enterprise Value/Ebitda: 16.38
• 1Y Price Target: $386.67
• Price Target Upside: 18.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 11.77
• Revenue Forecast (FY): $831.35M

• Rating: 76 Outperform
• Price Target: $383.00 ▲(17.85% Upside)

InterDigital's strong financial performance and positive earnings call sentiment are the most significant factors driving the stock score. The company's robust profitability, growth, and strategic achievements in licensing and arbitration are key strengths. However, mixed technical indicators and ongoing litigation challenges slightly temper the overall outlook.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong demand for InterDigital's technologies and successful expansion of its licensing agreements, supporting long-term financial stability and market presence.

Strong Profit Margins

High profit margins reflect efficient operations and pricing power, contributing to sustainable profitability and competitive advantage in the technology sector.

AI Start-up Acquisition

The acquisition of Deep Render strengthens InterDigital's capabilities in AI and video technology, positioning it for future growth in these high-demand areas.

Negative Factors

Ongoing Litigation

Litigation with major firms like Disney can lead to financial and reputational risks, potentially impacting InterDigital's market position and operational focus.

Challenges with Tencent Licensing

Difficulties in securing licensing agreements with large companies like Tencent may hinder revenue growth and reflect challenges in market negotiations.

Regulatory Risks

While favorable, the injunction highlights ongoing regulatory challenges that could affect InterDigital's operations and require significant legal resources.

InterDigital Business Overview & Revenue Model

Company Description

InterDigital (IDCC) is a technology company that specializes in advancing wireless communications and semiconductor technologies. Founded in 1972, the company focuses on developing innovative solutions for mobile networks, including 5G, Internet of Things (IoT), and multimedia technologies. InterDigital's portfolio includes a range of intellectual property (IP) related to wireless standards, as well as products and services that enhance mobile connectivity and performance for various industries.

How the Company Makes Money

InterDigital generates revenue primarily through the licensing of its extensive portfolio of patents and intellectual property related to wireless communication technologies. This includes licensing agreements with major mobile device manufacturers, network operators, and technology firms who utilize InterDigital's innovations in their products and services. The company also earns revenue from research and development contracts, collaborations with industry partners, and the sale of technology solutions that support the deployment and optimization of wireless networks. Strategic partnerships with key players in the telecommunications industry further enhance InterDigital's earning potential by facilitating the adoption of its technologies across diverse applications.

InterDigital Financial Statement Overview

Summary

InterDigital exhibits a robust financial position across all verticals. The income statement reflects strong profitability and growth, while the balance sheet indicates a stable capital structure with effective leverage management. The cash flow statement underscores the company's ability to generate and manage cash efficiently. Overall, InterDigital is well-positioned in the software application industry, with a strong financial foundation and growth trajectory.

Income Statement

InterDigital's income statement shows strong profitability with a high gross profit margin of 90.18% and a net profit margin of 53.50% in TTM (Trailing-Twelve-Months). The company has demonstrated consistent revenue growth, with a 4.03% increase in the latest period. EBIT and EBITDA margins are robust at 66.02% and 74.12%, respectively, indicating efficient operations. Overall, the income statement reflects a healthy financial performance with strong growth and profitability.

Balance Sheet

The balance sheet of InterDigital is solid, with a debt-to-equity ratio of 0.44 in TTM, indicating manageable leverage. The return on equity is impressive at 49.92%, showcasing effective use of equity to generate profits. The equity ratio stands at 51.44%, reflecting a stable capital structure. While the company has reduced its debt levels over time, maintaining this trajectory will be crucial for sustained financial health.

Cash Flow

InterDigital's cash flow statement is strong, with a significant free cash flow growth rate of 102.57% in TTM, highlighting excellent cash generation capabilities. The operating cash flow to net income ratio is 0.86, and the free cash flow to net income ratio is 0.94, indicating efficient conversion of income into cash. The company has shown consistent improvement in cash flow metrics, supporting its operational and financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	928.59M	868.52M	549.59M	457.79M	425.41M	358.99M
Gross Profit	837.36M	699.28M	470.19M	386.38M	360.78M	188.81M
EBITDA	688.25M	544.75M	357.22M	225.63M	160.97M	153.13M
Net Income	496.78M	358.61M	214.07M	93.69M	55.30M	44.80M
Balance Sheet
Total Assets	2.14B	1.84B	1.77B	1.90B	1.63B	1.62B
Cash, Cash Equivalents and Short-Term Investments	1.26B	958.21M	1.01B	1.20B	941.63M	929.75M
Total Debt	487.75M	490.94M	625.16M	626.99M	444.37M	394.20M
Total Liabilities	1.04B	978.31M	1.19B	1.17B	875.24M	819.71M
Stockholders Equity	1.10B	857.22M	581.55M	724.89M	745.24M	773.37M
Cash Flow
Free Cash Flow	630.46M	265.68M	169.11M	243.29M	90.84M	121.06M
Operating Cash Flow	673.09M	271.53M	213.73M	286.04M	129.12M	163.47M
Investing Cash Flow	-66.84M	109.45M	-85.17M	-314.71M	-36.91M	-310.05M
Financing Cash Flow	-168.41M	-272.39M	-388.76M	18.60M	-74.47M	-132.86M

InterDigital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 325.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IDCC, the sentiment is Negative. The current price of 325 is below the 20-day moving average (MA) of 348.36, below the 50-day MA of 359.11, and above the 200-day MA of 270.73, indicating a neutral trend. The MACD of -2.70 indicates Positive momentum. The RSI at 35.83 is Neutral, neither overbought nor oversold. The STOCH value of 28.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IDCC.

InterDigital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDCC	76 Outperform	$8.96B	23.48	54.52%	0.66%	28.75%	85.06%
NICE	71 Outperform	$6.60B	12.24	15.23%	―	9.46%	34.09%
PEGA	69 Neutral	$9.91B	39.56	51.96%	0.16%	17.00%	120.21%
SRAD	67 Neutral	$7.01B	63.84	9.79%	―	18.99%	66.43%
CVLT	65 Neutral	$5.33B	69.40	32.87%	―	22.02%	-55.25%
ESTC	65 Neutral	$7.90B	-72.13	-12.84%	―	16.98%	-265.85%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

InterDigital Corporate Events

InterDigital Updates Executive Severance Policy

On September 4, 2025, InterDigital, Inc. announced changes to its Executive Severance and Change in Control Policy, requiring executives to enter into a mutual agreement for individual arbitration to receive policy benefits. This move, which mandates binding arbitration for employment-related claims, may impact how the company manages executive disputes and aligns with broader industry trends toward arbitration.