InterDigital (IDCC) AI Stock Analysis

• Market Cap: $8.05B
• Dividend Yield: 0.66%
• Average Volume (3M): 245.47K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 0.66
• 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: 260,588
• 30 Day Avg. Volume: 245,471
• 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: 1.40
• Enterprise Value/Revenue: 12.14
• Enterprise Value/Gross Profit: 13.46
• Enterprise Value/Ebitda: 16.38
• 1Y Price Target: $386.67
• Price Target Upside: 24.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 6.51
• Revenue Forecast (FY): $666.62M

• Rating: 69 Neutral
• Price Target: $338.00 ▲(8.88% Upside)

Score is supported by strong financial performance (high margins and strong free cash flow growth) and a constructive earnings-call backdrop (ARR/revenue growth and meaningful arbitration/licensing wins). This is tempered by weak near-term technicals (price below key moving averages with bearish momentum indicators) and only moderate valuation support (P/E 22.653 with a low 0.76% yield).

Positive Factors

High and sustainable margins from licensing

InterDigital’s licensing-focused business yields very high gross and operating margins, reflecting low marginal costs and strong pricing power from standard-essential patents. Such structural margins support durable profitability and reinvestment into R&D over multiple years.

Strong free cash flow generation

Robust FCF growth and strong conversion of earnings to cash underpin financial flexibility, enabling dividend increases, buybacks, strategic M&A like Deep Render, and sustained R&D spending without heavy external financing.

Growing recurring revenue and major arbitration win

Rapid ARR expansion and the multi-year Samsung arbitration provide recurring, contractually-backed revenue visibility. A widening licensed base and landmark settlements enhance cash flow predictability and reinforce InterDigital’s role as a key IP monetizer in wireless/video tech.

Negative Factors

Ongoing multi-jurisdictional litigation (Disney)

Sustained litigation creates legal expense, enforcement uncertainty and potential disruptions to licensing cash flows. Multi-jurisdictional suits can delay revenue recognition, risk injunction-driven product removals, and require management focus away from commercial growth.

Enforcement difficulties with large platform (Tencent)

Failure to secure voluntary licensing from a major platform signals enforcement complexity in key markets. Protracted disputes with a large customer can constrain revenue upside in those regions and limit the company’s ability to monetize core patents efficiently.

Revenue lumpiness from reliance on arbitrations and settlements

While large arbitration outcomes boost near-term revenue, dependence on episodic adjudications and negotiated settlements makes cash flows lumpy and timing uncertain. This dependence increases forecasting risk and ties growth to legal/negotiation outcomes rather than purely commercial adoption.

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 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: 310.43
• 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 310.43 is below the 20-day moving average (MA) of 320.37, below the 50-day MA of 340.09, and above the 200-day MA of 280.31, indicating a neutral trend. The MACD of -9.09 indicates Positive momentum. The RSI at 38.93 is Neutral, neither overbought nor oversold. The STOCH value of 41.47 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
PEGA	74 Outperform	$9.53B	38.04	51.96%	0.16%	17.00%	120.21%
NICE	71 Outperform	$7.24B	13.01	15.23%	―	9.46%	34.09%
IDCC	69 Neutral	$8.05B	21.09	54.52%	0.66%	28.75%	85.06%
SRAD	67 Neutral	$6.17B	55.99	9.79%	―	18.99%	66.43%
CVLT	65 Neutral	$5.48B	70.53	32.87%	―	22.02%	-55.25%
ESTC	65 Neutral	$7.64B	-70.48	-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 Renews Major Chinese Vendor Licensing Agreement

InterDigital has renewed a worldwide, non-exclusive, royalty-bearing license agreement with a major Chinese vendor for a five-year term, covering the vendor’s smartphones and other cellular-enabled devices under InterDigital’s standard essential cellular, WiFi, and HEVC patent portfolio. The agreement underscores the continued commercial relevance of InterDigital’s intellectual property and supports ongoing licensing revenue from a key market, reinforcing the company’s position as a significant patent licensor to global device manufacturers.

The most recent analyst rating on (IDCC) stock is a Buy with a $383.00 price target. To see the full list of analyst forecasts on InterDigital stock, see the IDCC Stock Forecast page.