InterDigital (IDCC) AI Stock Analysis

• Market Cap: $9.77B
• Dividend Yield: 0.61%
• Average Volume (3M): 398.09K
• Price to Earnings (P/E): 27.0
• Beta (1Y): 0.75
• Revenue Growth: 21.83%
• EPS Growth: 65.64%
• Country: US
• Employees: 430
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 5.35
• Shares Outstanding: 25,802,360
• 10 Day Avg. Volume: 221,736
• 30 Day Avg. Volume: 398,093
• 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: 0.73
• Enterprise Value/Revenue: 7.96
• Enterprise Value/Gross Profit: 8.84
• Enterprise Value/Ebitda: 11.39
• 1Y Price Target: $303.33
• Price Target Upside: -21.59% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 79 Outperform
• Price Target: $426.00 ▲(10.13% Upside)

InterDigital's strong financial performance and positive earnings call outcomes are the primary drivers of the stock's high score. The company's robust profitability, efficient operations, and significant agreements contribute to its favorable position. However, the high valuation and potential risks from tax legislation and litigation slightly temper the overall outlook.

Positive Factors

Strong Licensing Agreements

The long-term agreement with Samsung enhances revenue stability and demonstrates InterDigital's strong IP portfolio, supporting sustained growth.

Record Revenue Growth

The significant increase in recurring revenue reflects successful execution of licensing strategies, ensuring steady income and financial health.

Cash Flow Strength

Strong cash flow generation enhances InterDigital's ability to invest in R&D and pursue strategic opportunities, bolstering long-term growth.

Negative Factors

Ongoing Litigation with Disney

Prolonged legal disputes can divert resources and create uncertainty, potentially impacting focus and financial performance over time.

Dependency on Future Agreements

Reliance on future deals introduces uncertainty in revenue projections, which could affect financial stability if anticipated agreements do not materialize.

Uncertain Tax Rate Impact

Uncertainty around tax legislation can affect financial planning and profitability, posing a risk to long-term strategic initiatives.

InterDigital Business Overview & Revenue Model

Company Description

InterDigital, Inc. (IDCC) is a technology research and development company specializing in wireless communication and advanced technology solutions. The company operates primarily in the telecommunications sector, focusing on the development of innovative technologies that enhance mobile communication, including 5G, Internet of Things (IoT), and video delivery. InterDigital provides a range of products and services, including intellectual property licensing, technology solutions, and research services, aimed at enabling connectivity and improving user experiences in various applications.

How the Company Makes Money

InterDigital generates revenue primarily through licensing its extensive portfolio of patents and technologies to various companies in the telecommunications and consumer electronics industries. The company's key revenue streams include royalty payments from license agreements, where it allows other firms to use its patented technologies in their devices and services. Additionally, InterDigital earns income from the development and commercialization of proprietary technologies, contracts for research and development services, and collaborations with industry partners and standards organizations. Significant partnerships with leading technology firms and contributions to global standards for mobile communications also enhance its market position and revenue potential.

InterDigital Financial Statement Overview

Summary

InterDigital demonstrates a robust financial position with strong profitability, efficient operations, and solid cash flow generation. The company shows consistent revenue growth and maintains a healthy balance sheet with moderate leverage. These factors position InterDigital favorably within the software application industry, providing a solid foundation for future growth and stability.

Income Statement

InterDigital's income statement shows strong financial performance with a high gross profit margin of 90.02% and a net profit margin of 51.92% for TTM (Trailing-Twelve-Months), indicating efficient cost management and profitability. The revenue growth rate of 9.46% in the latest period reflects a positive growth trajectory. EBIT and EBITDA margins are robust at 62.65% and 69.85%, respectively, showcasing operational efficiency. Overall, the company demonstrates strong revenue growth and profitability, positioning it well within the industry.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.45, indicating a balanced approach to leveraging. Return on equity is impressive at 51.45%, reflecting effective use of shareholder funds to generate profits. The equity ratio stands at 54.74%, suggesting a solid capital structure with a good proportion of assets financed by equity. While the company maintains a healthy balance sheet, the industry average should be considered for a comprehensive assessment.

Cash Flow

InterDigital's cash flow statement highlights a significant free cash flow growth rate of 115.24%, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 0.50 suggests efficient cash conversion from profits. The free cash flow to net income ratio of 0.88 further supports the company's ability to generate cash relative to its earnings. Overall, the cash flow position is strong, supporting future growth and investment opportunities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	892.58M	868.52M	549.59M	457.79M	425.41M	358.99M
Gross Profit	803.50M	699.28M	470.19M	386.38M	360.78M	188.81M
EBITDA	623.43M	544.75M	357.22M	225.63M	160.97M	153.13M
Net Income	463.47M	358.61M	214.07M	93.69M	55.30M	44.80M
Balance Sheet
Total Assets	1.98B	1.84B	1.77B	1.90B	1.63B	1.62B
Cash, Cash Equivalents and Short-Term Investments	936.99M	958.21M	1.01B	1.20B	941.63M	926.65M
Total Debt	487.61M	487.54M	625.16M	660.67M	484.21M	415.88M
Total Liabilities	897.92M	978.31M	1.19B	1.17B	875.24M	819.71M
Stockholders Equity	1.09B	857.22M	581.55M	724.89M	745.24M	773.37M
Cash Flow
Free Cash Flow	311.23M	265.68M	169.11M	243.29M	90.84M	121.06M
Operating Cash Flow	354.79M	271.53M	213.73M	286.04M	129.12M	163.47M
Investing Cash Flow	-10.27M	109.45M	-85.17M	-314.71M	-36.91M	-310.05M
Financing Cash Flow	-124.69M	-272.39M	-388.76M	18.60M	-74.47M	-132.86M

InterDigital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 386.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 386.83 is above the 20-day moving average (MA) of 358.11, above the 50-day MA of 324.47, and above the 200-day MA of 241.24, indicating a bullish trend. The MACD of 14.98 indicates Negative momentum. The RSI at 72.32 is Negative, neither overbought nor oversold. The STOCH value of 84.97 is Negative, 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	―	$9.77B	26.98	51.97%	0.61%	21.83%	65.64%
NICE	―	$8.33B	15.93	15.07%	―	11.72%	37.05%
PEGA	―	$11.25B	44.91	51.96%	0.14%	17.00%	120.21%
CVLT	―	$7.55B	97.07	25.08%	―	21.62%	-53.99%
SRAD	―	$8.41B	67.32	11.80%	―	20.14%	335.82%
ESTC	―	$9.37B	-111.06	-9.65%	―	17.42%	-228.98%
Sector *	―	$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.

The most recent analyst rating on (IDCC) stock is a Buy with a $316.00 price target. To see the full list of analyst forecasts on InterDigital stock, see the IDCC Stock Forecast page.

InterDigital’s Earnings Call Highlights Record Growth and Positive Outlook

InterDigital’s recent earnings call painted a picture of a company riding high on a wave of record-breaking achievements. The sentiment was overwhelmingly positive, bolstered by a landmark agreement with Samsung and impressive growth in recurring revenue and non-smartphone segments. Despite these successes, the company acknowledged ongoing challenges, including legal proceedings and potential uncertainties surrounding intellectual property tariffs. However, the overall outlook remains optimistic, with enhanced financial guidance and a strong position in the development of 6G technology.

InterDigital’s Strong Q2 2025 Driven by Key Agreements

InterDigital, Inc. is a global research and development company specializing in wireless, video, and AI technologies, providing foundational innovations for connected devices and services across various industries. In its second quarter of 2025, InterDigital reported a significant financial performance boost, driven by a major arbitration decision with Samsung and a new licensing agreement with HP. The company’s revenue reached $300.6 million, marking a 34% increase from the previous year, while net income surged by 65% to $180.6 million. The company also achieved a record non-GAAP EPS of $6.52 and an Adjusted EBITDA of $236.7 million. The strategic agreements have propelled InterDigital’s annualized recurring revenue to an all-time high of $553 million, reflecting a 44% year-over-year growth. The Samsung agreement, valued at over $1 billion, is the largest in the company’s history and has significantly contributed to raising the full-year revenue guidance by $110 million. Looking ahead, InterDigital remains optimistic about its growth trajectory, with management raising its full-year 2025 revenue outlook and expecting continued momentum in its licensing programs.

InterDigital Wins $1.05 Billion Arbitration Against Samsung

On July 28, 2025, an arbitration panel from the International Chamber of Commerce determined the royalties for a patent license agreement between InterDigital Inc. and Samsung Electronics Co., Ltd. The agreement, covering Samsung’s products excluding digital televisions and computer display monitors, set royalties at $1.05 billion for the period from January 1, 2023, to December 31, 2030. This new agreement will result in InterDigital recognizing approximately $131 million in annual recurring revenue, marking a 67% increase from the previous license agreement. In the second quarter of 2025, InterDigital will also record $119 million in catch-up sales, in addition to $33 million in recurring revenue, enhancing its financial performance and industry positioning.

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.