InterDigital (IDCC) AI Stock Analysis

• Market Cap: $6.72B
• Dividend Yield: 0.81%
• Average Volume (3M): 270.37K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 0.78
• 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: 205,153
• 30 Day Avg. Volume: 270,365
• 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: 1.06
• Enterprise Value/Revenue: 7.96
• Enterprise Value/Gross Profit: 8.84
• Enterprise Value/Ebitda: 11.39
• 1Y Price Target: $248.67
• Price Target Upside: -3.82% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 77 Outperform
• Price Target: $293.00 ▲(13.33% Upside)

InterDigital's strong earnings call and financial performance are the most significant factors driving its overall stock score. While the technical analysis suggests caution due to overbought conditions, the company's robust agreements and increased guidance project a positive outlook. The valuation remains moderate, providing a balanced view of growth potential versus current earnings.

Positive Factors

Financial Resilience

More than 90% of its revenue is tied to long-term fixed fee arrangements that are not impacted by units shipped/sold in any particular period, offering resilience in the face of broader macro uncertainty.

Partnerships and Deals

The stock is attractive given the upside potential from new and expanding partnerships in the smartphone market, the medium-term opportunity in consumer electronics, and the medium-to-long-term opportunity to license to streaming video platforms.

Revenue Growth

InterDigital saw 44% recurring revenue growth, driven largely by the arbitration conclusion with Samsung, the HP deal signed in April, and the vivo deal signed in May.

Negative Factors

Innovation Dependency

The recurring revenue growth from Consumer Electronics and IoT was also roughly flat YoY, and further growth depends on the Company’s innovation pace and ability to monetize its patents.

Market Saturation

With the company already covering 80% of the smartphone market, the magnitude of future one-time surprises will likely be lower, and implied valuation of this potential revenue stream should be substantially lower than the valuation of the recurring revenues.

Valuation Concerns

Challenging valuation is another key negative.

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 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	311.81M	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	71.46M	109.45M	-85.17M	-42.75M	-36.91M	-310.05M
Financing Cash Flow	-82.02M	-272.39M	-388.76M	19.60M	-74.47M	-132.86M

InterDigital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 258.54
• 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 258.54 is below the 20-day moving average (MA) of 260.48, above the 50-day MA of 239.65, and above the 200-day MA of 209.49, indicating a bullish trend. The MACD of 7.97 indicates Positive momentum. The RSI at 60.79 is Neutral, neither overbought nor oversold. The STOCH value of 27.26 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	77 Outperform	$6.72B	18.55	51.97%	0.81%	21.83%	65.64%
CVLT	75 Outperform	$7.83B	98.31	25.08%	―	21.62%	-53.99%
PEGA	71 Outperform	$8.95B	45.24	41.55%	0.14%	12.47%	65.19%
CWAN	69 Neutral	$5.79B	12.36	34.61%	―	36.68%	―
QXO	60 Neutral	$13.67B	―	-0.39%	―	3310.77%	93.28%
Sector *	57 Neutral	HK$14.80B	10.64	-0.76%	4.27%	6.99%	-31.80%
VERX	56 Neutral	$4.10B	235.54	-20.95%	―	15.00%	-349.61%

InterDigital Corporate Events

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.

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.