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Acacia Research Corp. (ACTG)
:ACTG
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Acacia Research
(NASDAQ:ACTG)
72Outperform
Acacia Research (ACTG) vs. S&P 500 (SPY)
Market Cap
$411.87M
Dividend YieldN/A
Average Volume (3M)158.12K
Price to Earnings (P/E)9.1
Beta (1Y)0.78
Revenue Growth261.08%
EPS GrowthN/A
CountryUS
Employees170
SectorIndustrials
Sector Strength72
IndustryCorporate Services
Share Statistics
EPS (TTM)0.46
Shares Outstanding97,368,164
10 Day Avg. Volume228,632
30 Day Avg. Volume158,116
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.46
Price to Cash Flow (P/CF)-178.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.00Price Target Upside65.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Acacia Research Business Overview & Revenue Model
Company DescriptionAcacia Research Corp. engages in the acquisition, development, and patents technologies through its subsidiaries. Its operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, if necessary, with the enforcement against unauthorized users of their patented technologies. The company was founded by Robert Bruce Stewart on January 25, 1993 and is headquartered in Newport Beach, CA.
How the Company Makes MoneyAcacia Research makes money primarily through acquiring patents and patent rights, which it then licenses to other companies in exchange for royalties or settlement payments. Revenue is generated through licensing agreements, where companies pay for the right to use Acacia's patented technologies. Additionally, the company may engage in litigation to enforce patent rights and secure settlements. Acacia also invests in and partners with companies to enhance its patent portfolio and explore new revenue-generating opportunities, leveraging both its extensive IP assets and strategic industry relationships.
Acacia Research Financial Statement Overview
Summary
Acacia Research demonstrates strong revenue growth and effective balance sheet management, with a low debt-to-equity ratio and high equity ratio. However, the company faces profitability challenges and negative free cash flow, which need addressing for sustainable financial health.Income Statement
Acacia Research shows strong growth in revenue, with a remarkable increase from previous years, particularly in the TTM period. The gross profit margin is improving, indicating effective cost management. However, the net profit margin shows volatility, with a significant drop from the previous annual report, pointing to potential profitability challenges.75
Positive
Balance Sheet
The balance sheet of Acacia Research is robust, with a low debt-to-equity ratio indicating strong leverage management. The company has a high equity ratio, ensuring financial stability. Additionally, the return on equity is substantial, reflecting effective utilization of shareholder funds.80
Positive
Cash Flow
While the operating cash flow has improved significantly in the TTM period, indicating better cash generation from operations, the free cash flow remains negative, primarily due to high capital expenditures. The cash flow to net income ratios suggest potential mismatches in profitability and cash generation.65
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 95.07M | 125.10M | 59.22M | 88.05M | 29.78M | 11.25M | Gross Profit |
| 55.55M | 72.27M | 21.84M | 51.95M | 4.96M | -5.29M | EBIT |
| 4.40M | 20.94M | -5.63M | 7.89M | -19.52M | -23.42M | EBITDA |
| -99.88M | 84.33M | -107.20M | 25.23M | -14.72M | -15.73M | Net Income Common Stockholders |
| 159.54M | 67.06M | -110.94M | 149.20M | 109.23M | -17.13M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 165.46M | 439.91M | 386.14M | 707.47M | 451.33M | 168.34M | Total Assets |
| 223.95M | 633.54M | 482.93M | 798.86M | 515.52M | 218.16M | Total Debt |
| 33.64M | 13.51M | 62.32M | 183.28M | 116.61M | 1.26M | Net Debt |
| -95.17M | -326.58M | -225.46M | -125.67M | -48.93M | -56.09M | Total Liabilities |
| 32.71M | 43.94M | 213.61M | 368.38M | 222.99M | 43.20M | Stockholders Equity |
| 191.24M | 568.27M | 258.28M | 419.43M | 281.49M | 173.13M |
| Cash Flow | Free Cash Flow | ||||
| -13.49M | -28.70M | -43.07M | -7.76M | -33.60M | -6.91M | Operating Cash Flow |
| 1.97M | -22.51M | -37.34M | 13.33M | -19.62M | -2.31M | Investing Cash Flow |
| 116.16M | 16.18M | 184.46M | 35.75M | 18.60M | -68.06M | Financing Cash Flow |
| -76.24M | 58.63M | -166.14M | 59.74M | 109.21M | 33.92M |
Acacia Research Technical Analysis
Neutral
4.23
Price Trends
4.28
Negative
4.41
Negative
4.70
Negative
Market Momentum
-0.05
Negative
51.11
Neutral
86.16
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACTG, the sentiment is Neutral. The current price of 4.23 is above the 20-day moving average (MA) of 4.21, below the 50-day MA of 4.28, and below the 200-day MA of 4.70, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 51.11 is Neutral, neither overbought nor oversold. The STOCH value of 86.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ACTG.
Acacia Research Risk Analysis
Acacia Research disclosed 52 risk factors in its most recent earnings report. Acacia Research reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Acacia Research Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $411.87M | 9.13 | 9.34% | ― | 261.08% | ― | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% | |
58 Neutral | $280.46M | ― | -10.32% | ― | 14.72% | 9.35% | |
56 Neutral | $4.50B | ― | -20.26% | ― | 10.38% | 6.88% | |
54 Neutral | $541.52M | ― | -1.29% | ― | 5.53% | 90.89% | |
46 Neutral | $568.96M | ― | 57.39% | ― | 16.42% | 50.85% | |
43 Neutral | $784.26M | ― | -65.36% | 15.97% | -9.70% | -5576.16% |
* Industrials Sector Average
Performance Comparison
ACTG
Acacia Research
4.23
0.21
5.22%
XRX
Xerox
6.11
-9.39
-60.58%
VRNS
Varonis Systems
39.73
-9.82
-19.82%
QTRX
Quanterix
7.60
-19.21
-71.65%
RPAY
Repay Holdings
5.74
-5.15
-47.29%
PRTH
Priority Technology Holdings
7.32
4.19
133.87%
Acacia Research Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: -10.57% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant revenue growth and a strong cash position, driven by strategic acquisitions like Deflecto and Benchmark. However, challenges such as a decline in intellectual property revenue, a decrease in industrials revenue, and an overall net loss were also highlighted.Highlights
Acquisition of Deflecto
Acacia Research acquired Deflecto for $103.7 million, including $48 million in debt financing and $55.7 million in equity. Deflecto is expected to generate $128 million to $136 million in revenue and $17.5 million to $19.5 million in EBITDA for 2024.
Significant Revenue Growth
Acacia Research reported $23.3 million in consolidated revenue for Q3 2024, up 131% compared to the third quarter of last year, driven by the full impact of the Benchmark acquisition.
Energy Vertical Performance
The energy operations generated $15.8 million in revenues during the quarter, up 12% from $14.2 million in the second quarter, reflecting the full quarter impact of Benchmark's acquisition.
Strong Cash Position
Acacia's current cash position grew to approximately $280 million compared to $242 million as of September 30, 2022, despite completing three acquisitions in the last 12 months.
Lowlights
Intellectual Property Revenue Decline
Intellectual property operations delivered $0.5 million in revenue during the third quarter, down from $5.3 million in the prior quarter due to no paid-up licensing agreements executed this quarter.
Operating Loss and Net Loss
The company recorded an operating loss of $10.3 million, although this was down 22% compared to the same quarter last year. GAAP net loss attributable to Acacia was $14 million, or $0.14 per share.
Decrease in Industrials Revenue
Industrial operations generated $7 million in revenue during the quarter, compared to $8.3 million in the same quarter last year, due to a decrease in printer sales.
Company Guidance
During the Acacia Research Q3 2024 earnings call, several key metrics and financial guidance were highlighted. The company reported consolidated revenues of $23.3 million, up 131% compared to the same quarter last year, mainly due to acquisitions. The acquisition of Deflecto for $103.7 million, financed by $48 million in debt and $55.7 million in equity, is expected to generate 2024 revenues between $128 million and $136 million, with an EBITDA between $17.5 million and $19.5 million. Acacia generated $1.7 million of adjusted EBITDA in Q3, bolstered by $6.9 million in operated segment adjusted EBITDA. Their energy operations, including the Benchmark acquisition, contributed $15.8 million in revenues and $8.4 million in adjusted EBITDA. The company ended the quarter with a cash position of approximately $280 million and a book value per share of $5.85, aiming to strategically use cash reserves for further acquisitions and shareholder returns.Acacia Research Corporate Events
M&A Transactions
Acacia Research Expands Portfolio with Deflecto Acquisition
Positive
Oct 21, 2024
Acacia Research Corporation has acquired Deflecto Acquisition, Inc. for $103.7 million, expanding its portfolio with a leading manufacturer of essential products in commercial transportation, HVAC, and office markets. The transaction is expected to significantly boost revenue and be accretive to free cash flow. Deflecto, headquartered in Indianapolis, is projected to generate $128-$136 million in revenue for 2024, and will continue to be led by its current management team. The acquisition is funded through cash and a new secured credit facility.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.