InterDigital (IDCC) AI Stock Analysis

• Market Cap: $5.82B
• Dividend Yield: 1.07%
• Average Volume (3M): 230.72K
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.89
• Revenue Growth: 33.52%
• EPS Growth: 109.68%
• Country: US
• Employees: 430
• Sector: Technology
• Sector Strength: 87
• Industry: Software - Application
• EPS (TTM): 3.45
• Shares Outstanding: 25,936,735
• 10 Day Avg. Volume: 260,674
• 30 Day Avg. Volume: 230,720
• PEG Ratio: 1.63
• Price to Book (P/B): 6.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 40.79
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 1.86
• Enterprise Value/Gross Profit: 7.85
• Enterprise Value/Ebitda: 2.98
• 1Y Price Target: $235.50
• Price Target Upside: 4.19% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 78 Outperform
• Price Target: $265.00 ▲(17.24%Upside)

InterDigital's robust financial performance, driven by high profitability and strategic licensing agreements, is the key strength. Technical indicators support recent positive momentum. Valuation metrics are moderate, and earnings call insights reveal significant growth prospects. Despite some challenges like negative cash flow and pending arbitration, the overall outlook remains positive.

Positive Factors

Financial Performance

There is room for upside in profitability as the company aims for a long-term target of 60% EBITDA margin.

Growth Opportunities

InterDigital's growth opportunities include long-term expansion into cloud services and video streaming, as well as progress in core markets like smartphones and consumer electronics.

Partnerships

The stock is considered attractive due to the upside potential from new and expanding partnerships in the smartphone market, and opportunities in consumer electronics and video streaming platforms.

Negative Factors

Market Dependency

More than 90% of InterDigital's revenue is tied to long-term fixed-fee arrangements that are not impacted by units shipped or sold in any particular period, offering resilience to its business model.

Revenue Concentration

InterDigital now has agreements with 7 of the top 10 largest smartphone vendors, covering approximately 80% of the global smartphone market.

InterDigital Business Overview & Revenue Model

Company Description

InterDigital, Inc. (IDCC) is a global technology research and development company specializing in wireless and video technologies. The company operates primarily in the telecommunications sector, focusing on the development of advanced mobile and video solutions. InterDigital's core products and services include technology licensing and partnerships that enable wireless communications, video standards, and related innovations. The company is known for its contributions to industry standards and the licensing of its extensive patent portfolio to leading technology companies worldwide.

How the Company Makes Money

InterDigital makes money primarily through licensing its extensive portfolio of patents and technologies to other companies in the telecommunications and technology industries. The company's revenue model is centered on collecting royalties from licensing agreements with major mobile device manufacturers, network equipment vendors, and other technology companies. These licensing agreements often involve long-term contracts and can be based on a percentage of the licensee's sales or a fixed annual fee. Additionally, InterDigital engages in collaborative partnerships and research agreements that not only enhance its technological offerings but also contribute to its revenue streams.

InterDigital Financial Statement Overview

Summary

InterDigital exhibits strong profitability and financial stability with high profit margins and effective use of equity. However, the decline in revenue and free cash flow growth rates poses potential challenges for future growth.

Income Statement

InterDigital's income statement shows strong profitability with a high gross profit margin of 91.1% and a net profit margin of 48.1% for TTM, indicating efficient cost management and strong bottom-line performance. However, the revenue growth rate is negative at -6.1% compared to the previous year, which may be a concern for future growth. The EBIT margin of 57.3% and EBITDA margin of 67% reflect robust operational efficiency.

Balance Sheet

The balance sheet of InterDigital highlights financial stability with a debt-to-equity ratio of 0.50, indicating moderate leverage. A strong equity ratio of 50.3% suggests good financial health and asset financing primarily through equity. Return on equity (ROE) is impressive at 41.9%, showcasing effective utilization of shareholder funds to generate profits.

Cash Flow

InterDigital's cash flow statement reflects a decline in free cash flow growth rate by -45.6% over the past year, which is a concern. However, the operating cash flow to net income ratio of 0.51 indicates decent cash conversion from profits. The free cash flow to net income ratio stands at 0.37, suggesting sufficient cash management despite the decline in free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	815.48M	868.52M	549.59M	457.79M	425.41M	358.99M
Gross Profit	742.83M	699.28M	470.19M	386.38M	360.78M	188.81M
EBITDA	546.36M	544.75M	357.22M	225.63M	160.97M	153.13M
Net Income	392.56M	358.61M	214.07M	93.69M	55.30M	44.80M
Balance Sheet
Total Assets	1.86B	1.84B	1.77B	1.90B	1.63B	1.62B
Cash, Cash Equivalents and Short-Term Investments	883.29M	958.21M	1.01B	1.20B	941.63M	926.65M
Total Debt	471.26M	487.54M	625.16M	660.67M	484.21M	415.88M
Total Liabilities	924.96M	978.31M	1.19B	1.17B	875.24M	819.71M
Stockholders Equity	936.88M	857.22M	581.55M	724.89M	745.24M	773.37M
Cash Flow
Free Cash Flow	144.60M	265.68M	169.11M	243.29M	90.84M	121.06M
Operating Cash Flow	200.77M	271.53M	213.73M	286.04M	129.12M	163.47M
Investing Cash Flow	152.18M	109.45M	-85.17M	-42.75M	-36.91M	-310.05M
Financing Cash Flow	-266.02M	-272.39M	-388.76M	19.60M	-74.47M	-132.86M

InterDigital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 226.04
• 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 IDCC, the sentiment is Positive. The current price of 226.04 is above the 20-day moving average (MA) of 225.49, above the 50-day MA of 217.52, and above the 200-day MA of 192.81, indicating a bullish trend. The MACD of 2.10 indicates Positive momentum. The RSI at 54.24 is Neutral, neither overbought nor oversold. The STOCH value of 31.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IDCC.

InterDigital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDCC	78 Outperform	$5.82B	17.81	50.29%	1.07%	33.52%	109.68%
PEGA	77 Outperform	$9.25B	52.54	39.29%	0.22%	14.29%	151.35%
PEGA	77 Outperform	$9.25B	52.54	39.29%	0.22%	14.29%	151.35%
CWAN	71 Outperform	$6.27B	13.30	58.14%	―	23.21%	―
CWAN	71 Outperform	$6.27B	13.30	58.14%	―	23.21%	―
QXO	68 Neutral	$14.73B	―	1.44%	―	0.22%	48.10%
QXO	68 Neutral	$14.73B	―	1.44%	―	0.22%	48.10%
CVLT	66 Neutral	$7.77B	103.46	25.23%	―	18.63%	-55.09%
CVLT	66 Neutral	$7.77B	103.46	25.23%	―	18.63%	-55.09%
Sector *	63 Neutral	$34.07B	6.13	-11.73%	1.80%	5.33%	-18.31%
VERX	54 Neutral	$5.62B	235.54	-19.65%	―	15.20%	-666.94%
VERX	54 Neutral	$5.62B	235.54	-19.65%	―	15.20%	-666.94%

InterDigital Corporate Events

InterDigital Holds Annual Shareholders Meeting, Key Decisions Made

On June 11, 2025, InterDigital, Inc. held its Annual Meeting of Shareholders where several key decisions were made. The shareholders elected directors for a one-year term, approved the 2025 Equity Incentive Plan, passed a resolution on executive compensation, and ratified PricewaterhouseCoopers LLP as the independent public accounting firm for the year ending December 31, 2025, reflecting continued confidence in the company’s strategic direction and governance.

The most recent analyst rating on (IDCC) stock is a Buy with a $160.00 price target. To see the full list of analyst forecasts on InterDigital stock, see the IDCC Stock Forecast page.

InterDigital Corrects Q2 Revenue Guidance in Call

On May 1, 2025, InterDigital, Inc. hosted a conference call to discuss its first quarter 2025 financial performance. During the call, CFO Richard Brezski corrected a misstatement regarding Q2 revenue guidance, clarifying it as $165 to $170 million, aligning with the company’s earlier guidance. The company emphasized that this correction does not update or affirm previous guidance.