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InterDigital (IDCC)
NASDAQ:IDCC
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InterDigital
(NASDAQ:IDCC)
79Outperform
Positive Factors
Market Coverage
InterDigital now has agreements with 7 of the top 10 largest smartphone vendors, covering approximately 80% of the global smartphone market.
Revenue Growth
InterDigital signed a new multiyear royalty-bearing license agreement with a major Chinese smartphone vendor, significantly raising its revenue outlook.
Negative Factors
Market Concerns
Still struggle to fully get behind the story without more evidence on the ability to get China smartphone vendors and greenfield streaming companies to pay.
InterDigital (IDCC) vs. S&P 500 (SPY)
Market Cap
$5.41B
Dividend Yield0.79%
Average Volume (3M)388.01K
Price to Earnings (P/E)17.8
Beta (1Y)0.70
Revenue Growth58.03%
EPS Growth80.93%
CountryUS
Employees430
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)12.04
Shares Outstanding25,684,040
10 Day Avg. Volume381,891
30 Day Avg. Volume388,008
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)N/A
Price to Sales (P/S)6.23
Price to Cash Flow (P/CF)7.00
P/FCF Ratio7.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$225.00Price Target Upside5.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
InterDigital Business Overview & Revenue Model
Company DescriptionInterDigital, Inc. (IDCC) is a technology research and development company that specializes in delivering advanced wireless and video technologies for mobile devices, networks, and services worldwide. The company operates in the telecommunications and technology sectors, focusing on developing technologies that are essential for wireless communications, video compression, and other digital and multimedia solutions. InterDigital is known for its contributions to global wireless standards and providing cutting-edge innovations to enhance network performance and efficiency.
How the Company Makes MoneyInterDigital makes money primarily through the licensing of its extensive portfolio of patented technologies. The company generates revenue by providing manufacturers of wireless products, including mobile devices, with the right to use its patented technologies through licensing agreements. These agreements are a significant revenue stream as they often involve long-term contracts with major players in the telecommunications industry. Additionally, InterDigital engages in strategic partnerships and collaborations that enable it to leverage its technological expertise and intellectual property, further contributing to its revenue. The company's earnings are also supported by its ongoing research and development efforts, which help maintain its competitive edge and expand its patent portfolio.
InterDigital Financial Statement Overview
Summary
InterDigital displays strong financial health with impressive profitability and revenue growth. The balance sheet is stable with manageable debt levels, though high liabilities warrant careful monitoring. The cash flow situation is strong, supporting the company's operational needs.Income Statement
InterDigital has demonstrated significant revenue growth, increasing from $457.8 million in 2022 to $868.5 million in 2024. The gross profit margin remains strong at 100% due to the absence of cost of goods sold, and net profit margin has improved to 41.3%, indicating enhanced profitability. However, the lack of diversification in revenue sources could pose a risk if market conditions change.85
Very Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 46.7%. The debt-to-equity ratio has decreased, reflecting improved financial leverage. However, the relatively high total liabilities suggest potential risk if cash flows become constrained.78
Positive
Cash Flow
InterDigital's operating cash flow has increased steadily, leading to a robust free cash flow position. The operating cash flow to net income ratio is healthy, indicating efficient cash generation. However, high financing cash outflows might impact future liquidity.82
Very Positive
| 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 | 249.67M | 188.81M | EBIT |
| 439.51M | 221.62M | 71.77M | 32.47M | -8.95M | EBITDA |
| 544.75M | 356.63M | 225.36M | 159.88M | 152.29M | Net Income Common Stockholders |
| 358.61M | 214.07M | 93.69M | 42.19M | 44.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 958.21M | 1.01B | 1.20B | 941.63M | 926.65M | Total Assets |
| 1.84B | 1.77B | 1.90B | 1.63B | 1.62B | Total Debt |
| 487.54M | 625.16M | 660.67M | 484.21M | 415.88M | Net Debt |
| -39.82M | 188.08M | -32.81M | -457.41M | -57.60M | 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
Positive
212.59
Price Trends
196.36
Positive
187.34
Positive
157.57
Positive
Market Momentum
4.07
Positive
58.22
Neutral
39.82
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 212.59 is above the 20-day moving average (MA) of 211.38, above the 50-day MA of 196.36, and above the 200-day MA of 157.57, indicating a bullish trend. The MACD of 4.07 indicates Positive momentum. The RSI at 58.22 is Neutral, neither overbought nor oversold. The STOCH value of 39.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IDCC.
InterDigital Risk Analysis
InterDigital disclosed 36 risk factors in its most recent earnings report. InterDigital reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
InterDigital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.41B | 17.84 | 49.85% | 0.79% | 58.03% | 80.93% | |
76 Outperform | $171.41B | 17.23 | 41.96% | 2.16% | 12.13% | 36.17% | |
74 Outperform | $867.27B | 93.94 | 14.85% | 1.18% | 40.30% | -22.79% | |
67 Neutral | $52.20B | 21.23 | 28.16% | 1.94% | -4.99% | -9.18% | |
63 Neutral | $4.35B | ― | -16.69% | ― | -25.29% | -449.44% | |
63 Neutral | $10.97B | 22.08 | 8.34% | 3.86% | -12.91% | -42.12% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% |
* Technology Sector Average
Performance Comparison
IDCC
InterDigital
212.59
109.22
105.66%
AVGO
Broadcom
190.09
65.97
53.15%
NXPI
NXP Semiconductors
205.80
-40.99
-16.61%
QCOM
Qualcomm
153.10
-12.82
-7.73%
SLAB
Silicon Laboratories
123.80
-16.36
-11.67%
SWKS
Skyworks Solutions
68.23
-35.75
-34.38%
InterDigital Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 16.49% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
InterDigital reported record-breaking revenue and strong financial metrics, driven by significant licensing agreements and growth in consumer electronics and IoT. However, challenges such as ongoing litigation with Disney, contract expirations, and uncertainties in arbitration outcomes present potential headwinds.Highlights
Record-Breaking Revenue
In 2024, InterDigital achieved the highest annual revenue in its history, with a 60% increase to $869 million.
Fourth Quarter Revenue Surge
Q4 revenue increased 140% year-over-year to $253 million, driven by new agreements with major companies like Oppo, Lenovo, and ZTE.
Significant Licensing Agreements
InterDigital closed 14 new agreements in 2024, including with Google, Samsung, and TPV, contributing to more than $3.3 billion in license agreements since 2021.
Consumer Electronics and IoT Growth
In 2024, over 30% of revenue came from the consumer electronics and IoT program, showcasing significant growth potential beyond smartphones.
Strong Financial Performance
Adjusted EBITDA margin improved to 63%, and the company generated almost $1 billion in cash by the end of 2024.
Dividend Increase
InterDigital's Board approved a 33% increase in the dividend from $0.45 to $0.60 per share.
Lowlights
Disney Litigation
Initiated a multi-jurisdictional enforcement action against Disney for patent infringement, highlighting challenges in amicable negotiations.
Contract Expirations
Facing $91 million in contract expirations in 2025, including a significant contract with Xiaomi.
Uncertain Arbitration Outcomes
Awaiting the outcome of arbitration with Samsung, which introduces uncertainty into 2025 revenue projections.
Dilution from Convertible Notes
Non-GAAP EPS for Q4 was affected by greater dilution from convertible notes due to higher share prices.
Company Guidance
In the fourth quarter of 2024, InterDigital achieved significant growth, with revenue reaching $253 million, marking a 140% increase year-over-year. The adjusted EBITDA margin stood at an impressive 78%, reflecting substantial operational efficiency. For the full year, revenue soared by nearly 60% to $869 million, driven by strategic licensing agreements with major players like OPPO, ZTE, and Google. The company also expanded its reach in consumer electronics and IoT, contributing over 30% of annual revenue. Looking ahead to 2025, InterDigital projects total revenue between $660 million and $760 million, with expected growth in annualized recurring revenue by double digits, alongside a 33% increase in dividends, highlighting their commitment to shareholder returns.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.