InterDigital (IDCC) AI Stock Analysis

• Market Cap: $8.38B
• Dividend Yield: 0.65%
• Average Volume (3M): 303.23K
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.74
• Revenue Growth: 21.83%
• EPS Growth: 65.64%
• Country: US
• Employees: 430
• Sector: Technology
• Sector Strength: 85
• Industry: Software - Application
• EPS (TTM): 5.35
• Shares Outstanding: 25,802,360
• 10 Day Avg. Volume: 300,461
• 30 Day Avg. Volume: 303,228
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 7.96
• Enterprise Value/Gross Profit: 8.84
• Enterprise Value/Ebitda: 11.39
• 1Y Price Target: $275.33
• Price Target Upside: -14.72% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 81 Outperform
• Price Target: $316.00 ▼(-2.13% Downside)

InterDigital's strong financial performance and positive earnings call are the most significant factors driving the high stock score. The company's robust profitability, efficient operations, and strategic agreements, particularly with Samsung, enhance its growth prospects. Technical indicators support a bullish outlook, although valuation metrics suggest the stock is fairly priced. Potential risks from tax legislation and legal proceedings are noted but do not significantly detract from the overall positive outlook.

Positive Factors

Revenue Growth

The substantial increase in recurring revenue indicates strong market demand and effective monetization of InterDigital's technology portfolio, supporting long-term growth.

Strategic Partnerships

The significant agreement with Samsung enhances InterDigital's revenue base and strengthens its competitive position in the telecommunications industry.

6G Development Leadership

Leadership in 6G development positions InterDigital to capitalize on future technology trends, ensuring sustained relevance and potential revenue streams.

Negative Factors

Decline in Free Cash Flow

A significant decline in free cash flow growth could impact InterDigital's ability to invest in new technologies and manage financial obligations effectively.

Ongoing Legal Challenges

Prolonged legal disputes can drain resources and create uncertainty, potentially diverting focus from core business activities and innovation.

Uncertain Impact of IP Tariffs

Uncertainty around IP tariffs could affect InterDigital's licensing revenue and market dynamics, posing risks to its business model.

InterDigital Business Overview & Revenue Model

Company Description

InterDigital, Inc., together with its subsidiaries, designs and develops technologies that enable and enhance wireless communications in the United States, China, South Korea, Japan, Taiwan, and Europe. It provides technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G NR, beyond 5G (B5G), extended reality over wireless, and cellular Internet of Things (IoT) areas, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. It also provides video coding and transmission technologies; and engages in the research and development of artificial intelligence. The company's patented technologies are used in various products that include cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, which comprise base stations; components, dongles, and modules for wireless devices; and IoT devices and software platforms. As of December 31, 2021, it had a portfolio of approximately 27,500 patents and patent applications related to wireless communications, video coding, display technology, and other areas. InterDigital, Inc. was incorporated in 1972 and is headquartered in Wilmington, Delaware.

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 strong profitability and financial stability, with impressive margins and return metrics. However, the decline in revenue and free cash flow growth rates presents potential challenges for sustaining growth momentum. The company's moderate leverage and effective equity utilization are positive indicators of its financial resilience.

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	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: 322.87
• 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 322.87 is above the 20-day moving average (MA) of 281.01, above the 50-day MA of 257.35, and above the 200-day MA of 217.12, indicating a bullish trend. The MACD of 15.87 indicates Negative momentum. The RSI at 78.17 is Negative, neither overbought nor oversold. The STOCH value of 89.69 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	81 Outperform	$8.38B	21.26	51.97%	0.65%	21.83%	65.64%
SRAD	77 Outperform	$9.33B	74.50	11.80%	―	20.14%	335.82%
NICE	74 Outperform	$8.81B	16.89	15.07%	―	11.72%	37.05%
CVLT	72 Outperform	$8.04B	100.85	25.08%	―	21.62%	-53.99%
PEGA	71 Outperform	$9.94B	48.83	41.55%	0.13%	12.47%	65.19%
ESTC	68 Neutral	$9.46B	192.75	-9.65%	―	17.42%	-228.98%
Sector *	61 Neutral	$36.69B	12.42	-10.20%	1.85%	8.50%	-7.32%

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.

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.

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.