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InterDigital
(NASDAQ:IDCC)
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Rating:75Outperform
Price Target:
$319.00
▼(-14.48% Downside)
Action:Reiterated
Date:06/15/26
IDCC scores well primarily due to exceptionally strong margins and free-cash-flow generation, plus solid balance-sheet flexibility. The score is tempered by revenue/quarterly timing volatility highlighted in results and guidance, and by a technically weaker intermediate-to-longer-term trend (price below key longer moving averages and negative MACD). Valuation is reasonable and the earnings call was broadly positive, but near-term cash timing and deal/enforcement dependency remain key swing factors.
Positive Factors
Free Cash Flow Strength
InterDigital's very strong trailing‑12‑month free cash flow (≈$580M) and near 1:1 FCF-to-net income ratio indicate high earnings quality and durable internal funding. This cash generation supports sustained R&D, enforcement activities, buybacks and dividends, reducing reliance on external financing over multiple quarters.
Negative Factors
Revenue Volatility / Lumpiness
InterDigital's revenue is sensitive to contract timing, catch‑ups and enforcement outcomes, producing pronounced year‑to‑year swings. Such lumpiness complicates short‑term visibility for operating cash and budgeting, and makes near‑term results and resource planning contingent on discrete deal or litigation outcomes rather than steady organic sales.
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Positive Factors
Negative Factors
Free Cash Flow Strength
InterDigital's very strong trailing‑12‑month free cash flow (≈$580M) and near 1:1 FCF-to-net income ratio indicate high earnings quality and durable internal funding. This cash generation supports sustained R&D, enforcement activities, buybacks and dividends, reducing reliance on external financing over multiple quarters.
Read all positive factors
InterDigital Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much of InterDigital’s sales come from licensing and patent royalties versus engineering services or product-related revenue, revealing whether the business depends on recurring, high-margin licensing income or on more cyclical services. Highlights concentration risk (heavy reliance on a few licensees or standards), sensitivity to handset and technology cycles, and the parts of the business most likely to drive margins, cash flow stability, and future growth.
Shows how much of InterDigital’s sales come from licensing and patent royalties versus engineering services or product-related revenue, revealing whether the business depends on recurring, high-margin licensing income or on more cyclical services. Highlights concentration risk (heavy reliance on a few licensees or standards), sensitivity to handset and technology cycles, and the parts of the business most likely to drive margins, cash flow stability, and future growth.
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The Fly
The FlyInterDigital (IDCC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.27B
Dividend Yield0.66%
Average Volume (3M)394.39K
Price to Earnings (P/E)19.8
Beta (1Y)0.78
Revenue Growth1.65%
EPS Growth-8.10%
CountryUS
Employees430
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)14.19
Shares Outstanding25,845,030
10 Day Avg. Volume526,298
30 Day Avg. Volume394,388
Financial Highlights & Ratios
PEG Ratio1.78
Price to Book (P/B)7.46
Price to Sales (P/S)9.85
P/FCF Ratio15.54
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue8.66
Enterprise Value/Gross Profit10.39
Enterprise Value/Ebitda13.44
Forecast
1Y Price Target
$425.00Price Target Upside13.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)7.3
Revenue Forecast (FY)$706.13M
InterDigital Business Overview & Revenue Model
Company Description
InterDigital, Inc., through its affiliated companies, specializes in the design and advancement of technologies that facilitate and improve wireless communications across major global regions, including the United States, China, South Korea, Japan...
How the Company Makes Money
InterDigital makes money primarily by licensing its intellectual property portfolio to companies that manufacture or sell products implementing cellular and related technologies. The company’s core revenue stream is patent licensing—typically stru...
InterDigital Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call presented multiple strong positives: revenue, EBITDA and EPS beat guidance; ARR rose 13% YoY to $567M; record smartphone ARR and broad market coverage; decisive enforcement wins; leadership in standards and patents; and a robust balance sheet with active capital returns. Near-term headwinds include a sizable catch-up revenue quarter that increased licensing expense, a $139M accounts receivable build leading to modest operating cash in Q1, some pending litigation and incomplete renewals, and Q2 guidance that is lower on a like-for-like basis absent additional deals or enforcement results. On balance, the positives — particularly recurring ARR growth, licensing pipeline, IP enforcement momentum, and strong margins — materially outweigh the near-term operational and timing challenges.Positive Updates
Revenue and Earnings Beat Guidance
Total revenue of $205 million in Q1 2026 beat guidance of $194–$200 million; GAAP diluted EPS was $2.14 (vs guidance $1.61–$1.86) and non-GAAP EPS was $2.57 (above midpoint guidance). Adjusted EBITDA was $112 million (vs guidance $101–$110 million) with an adjusted EBITDA margin of 54%.
Negative Updates
Large Catch-up Revenue and Associated Cost Impact
Q1 included $64 million of catch-up revenue tied to new consumer electronics agreements; this drove a significant increase in licensing expense (revenue share) in the quarter and contributed to higher enforcement costs year-over-year.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue and Earnings Beat Guidance
Total revenue of $205 million in Q1 2026 beat guidance of $194–$200 million; GAAP diluted EPS was $2.14 (vs guidance $1.61–$1.86) and non-GAAP EPS was $2.57 (above midpoint guidance). Adjusted EBITDA was $112 million (vs guidance $101–$110 million) with an adjusted EBITDA margin of 54%.
Read all positive updates
Company Guidance
InterDigital reiterated that Q2 revenue from existing contracts is expected to be $139–$143 million (generally consistent with Q1 ARR), with adjusted EBITDA of $67–$73 million (about a 50% margin), GAAP diluted EPS of $0.80–$0.97 and non‑GAAP diluted EPS of $1.41–$1.60; management is maintaining its full‑year guidance at prior levels and noted that any new agreements or enforcement outcomes would be incremental to these ranges. For context, Q1 results were above guidance—total revenue $205 million (vs. guidance $194–$200M) including $64 million of catch‑up revenue, adjusted EBITDA $112 million (54% margin), GAAP diluted EPS $2.14, non‑GAAP EPS $2.57, ARR $567 million (up 13% YoY) with smartphone ARR $492 million—and cash from operations was $16 million while accounts receivable rose $139 million (collections of which management expects will drive strong Q2 cash flow).InterDigital Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 828.92M | 834.01M | 868.52M | 549.59M | 457.79M | 425.41M |
| Gross Profit | 690.94M | 669.67M | 699.28M | 470.19M | 386.38M | 360.78M |
| EBITDA | 533.96M | 586.19M | 544.75M | 357.22M | 225.63M | 160.97M |
| Net Income | 366.37M | 406.64M | 358.61M | 214.07M | 93.69M | 55.30M |
Balance Sheet | ||||||
| Total Assets | 2.07B | 2.06B | 1.84B | 1.77B | 1.90B | 1.63B |
| Cash, Cash Equivalents and Short-Term Investments | 1.09B | 1.24B | 958.21M | 1.01B | 1.20B | 941.63M |
| Total Debt | 401.72M | 488.21M | 490.94M | 625.16M | 626.99M | 444.37M |
| Total Liabilities | 967.11M | 963.17M | 978.31M | 1.19B | 1.17B | 875.24M |
| Stockholders Equity | 1.10B | 1.10B | 857.22M | 581.55M | 724.89M | 745.24M |
Cash Flow | ||||||
| Free Cash Flow | 536.84M | 528.56M | 265.68M | 169.11M | 243.29M | 90.84M |
| Operating Cash Flow | 580.52M | 544.45M | 271.53M | 213.73M | 286.04M | 129.12M |
| Investing Cash Flow | -183.38M | -140.28M | 109.45M | -85.17M | -314.71M | -36.91M |
| Financing Cash Flow | -327.66M | -201.45M | -272.39M | -388.76M | 18.60M | -74.47M |
InterDigital Technical Analysis
Neutral
373.02
Price Trends
282.83
Negative
315.90
Negative
329.60
Negative
Market Momentum
0.97
Negative
52.20
Neutral
40.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IDCC, the sentiment is Neutral. The current price of 373.02 is above the 20-day moving average (MA) of 276.54, above the 50-day MA of 282.83, and above the 200-day MA of 329.60, indicating a neutral trend. The MACD of 0.97 indicates Negative momentum. The RSI at 52.20 is Neutral, neither overbought nor oversold. The STOCH value of 40.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $7.27B | 19.83 | 33.37% | 0.66% | 1.65% | -8.10% | |
75 Outperform | $6.03B | 16.38 | 37.43% | ― | 17.26% | ― | |
73 Outperform | $5.19B | 15.52 | 50.21% | 0.16% | 3.50% | 75.14% | |
73 Outperform | $4.62B | 56.36 | 7.31% | ― | 24.38% | 25.18% | |
68 Neutral | $6.21B | 93.74 | 35.35% | ― | 18.89% | -7.44% | |
67 Neutral | $5.61B | 11.21 | 14.03% | ― | 9.29% | 18.05% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
IDCC
InterDigital
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25.64%
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InterDigital Corporate Events
Executive/Board ChangesShareholder Meetings
InterDigital Shareholders Approve Bylaw Changes and Governance Items
Positive
Jun 15, 2026
At its June 10, 2026 annual meeting, InterDigital shareholders approved an amendment to the company’s bylaws to provide for officer exculpation under Pennsylvania corporate law, reinforcing legal protections for senior management and potenti...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.