InterDigital (IDCC) AI Stock Analysis

• Market Cap: $5.76B
• Dividend Yield: 0.86%
• Average Volume (3M): 222.14K
• Price to Earnings (P/E): 17.6
• Beta (1Y): 0.88
• Revenue Growth: 33.52%
• EPS Growth: 109.68%
• Country: US
• Employees: 430
• Sector: Technology
• Sector Strength: 96
• Industry: Software - Application
• EPS (TTM): N/A
• Shares Outstanding: 25,936,735
• 10 Day Avg. Volume: 233,523
• 30 Day Avg. Volume: 222,143
• PEG Ratio: 1.60
• Price to Book (P/B): 6.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 39.84
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 3.37
• Enterprise Value/Gross Profit: 19.77
• Enterprise Value/Ebitda: 5.86
• 1Y Price Target: $243.00
• Price Target Upside: -0.89% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 79 Outperform
• Price Target: $251.00 ▲(2.37%Upside)

InterDigital's overall score reflects strong financial performance and significant positive corporate developments, particularly the arbitration win against Samsung. While technical indicators and valuation present some concerns, the company's strategic licensing agreements and robust profitability support a favorable outlook.

Positive Factors

Financial Performance

InterDigital reported solid first-quarter results with 30% recurring revenue growth, driven largely by the new licensing deal it signed with vivo for its smartphones.

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.

Licensing Agreements

The new agreement with Samsung is at $131 million of recurring revenue per year, which is a 67% increase from the previous agreement.

Negative Factors

Market Penetration

The company is focusing on penetrating the remaining Chinese smartphone OEMs and expanding into the video streaming market, which may take longer to materialize.

Revenue 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.

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 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 displays strong profitability with high margins and effective equity utilization. However, the negative revenue growth and decline in free cash flow growth rate present challenges for sustaining growth momentum.

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

InterDigital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 245.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 245.18 is above the 20-day moving average (MA) of 226.54, above the 50-day MA of 223.34, and above the 200-day MA of 199.76, indicating a bullish trend. The MACD of 1.78 indicates Negative momentum. The RSI at 70.94 is Negative, neither overbought nor oversold. The STOCH value of 53.55 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
PEGA	79 Outperform	$10.26B	51.86	41.55%	0.18%	12.47%	65.19%
IDCC	79 Outperform	$5.76B	17.62	50.29%	0.86%	33.52%	109.68%
CWAN	78 Outperform	$6.09B	12.67	58.14%	―	23.21%	―
CVLT	75 Outperform	$7.28B	107.66	25.08%	―	21.62%	-53.99%
QXO	75 Outperform	$14.60B	―	1.44%	―	0.22%	48.10%
VERX	66 Neutral	$5.37B	235.54	-19.65%	―	15.20%	-666.94%
Sector *	63 Neutral	$34.93B	5.90	-12.00%	2.00%	5.61%	-19.55%

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.

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.