Adeia Inc. (ADEA)
NASDAQ:ADEA
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Adeia
(NASDAQ:ADEA)
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Rating:75Outperform
Price Target:
$34.00
▲(17.53% Upside)
Action:Reiterated
Date:06/03/26
ADEA scores well primarily due to strong current financial performance (high margins, strong free cash flow, and materially improved leverage). The score is moderated by mixed technical momentum and a less attractive valuation profile. Earnings call factors are supportive on reiterated guidance and major licensing wins, but notable risks (recurring revenue drop, customer dispute, litigation costs, and CEO transition) keep the overall score in the mid-range rather than high.
Positive Factors
Profitability & Cash Generation
Adeia's high margins and near‑one‑to‑one free cash flow conversion reflect a capital‑light, licensing business model that sustainably generates cash. That durable cash flow supports dividends, buybacks, M&A and patent monetization while insulating operations from short cyclical swings.
Negative Factors
Recurring Revenue Volatility
Large quarter‑over‑quarter swings in recurring revenue highlight sensitivity to renewal timing and subscriber trends. For an IP licensing firm, that volatility undermines predictability of long‑term royalty cash flows and requires consistent new deals/renewals to stabilize the core revenue base.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability & Cash Generation
Adeia's high margins and near‑one‑to‑one free cash flow conversion reflect a capital‑light, licensing business model that sustainably generates cash. That durable cash flow supports dividends, buybacks, M&A and patent monetization while insulating operations from short cyclical swings.
Read all positive factors
Adeia Key Performance Indicators (KPIs)
Adeia (ADEA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.52B
Dividend Yield1.17%
Average Volume (3M)2.62M
Price to Earnings (P/E)28.6
Beta (1Y)1.04
Revenue Growth21.09%
EPS Growth61.05%
CountryUS
Employees150
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.12
Shares Outstanding110,293,750
10 Day Avg. Volume3,074,705
30 Day Avg. Volume2,616,288
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)3.92
Price to Sales (P/S)4.25
P/FCF Ratio12.61
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue6.35
Enterprise Value/Gross Profit7.30
Enterprise Value/Ebitda11.52
Forecast
1Y Price Target
$37.00Price Target Upside27.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.42
Revenue Forecast (FY)$417.06M
Adeia Business Overview & Revenue Model
Company Description
Adeia Inc. is an international enterprise focused on intellectual property licensing within the consumer and entertainment sectors. Operating globally, the company licenses its proprietary innovations, marketed under the Adeia brand, to various en...
How the Company Makes Money
Adeia primarily makes money by licensing its patented technologies to other companies under multi-year license agreements. Revenue is generated mainly through (1) recurring patent license fees and (2) royalties tied to customers’ products or servi...
Adeia Earnings Call Summary
Earnings Call Date:May 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial picture: strong Q1 revenue (~$105M), very high adjusted EBITDA margin (60%), robust operating cash flow (~$58.5M), significant new license wins (AMD and Microsoft), patent portfolio expansion, technology progress (RapidCool), active tuck‑in M&A, share repurchases, dividends, and an S&P upgrade. Offsetting items include a meaningful sequential decline in recurring revenue (~30% QoQ) tied to subscriber declines and timing of renewals, the loss/nonrenewal dispute with DISH, reliance in Q1 on retroactive revenue components (AMD), ongoing litigation expenses, and a planned CEO departure that introduces near‑term leadership transition risk. Management reiterated full‑year guidance and emphasized a strong pipeline, but execution on renewals and new deals is required to meet targets.Positive Updates
Strong Q1 Revenue, EBITDA and Cash Generation
Reported revenue of $104.8M (also cited as $105M), adjusted EBITDA of $62.3M and an adjusted EBITDA margin of 60%. Generated $58.5M in operating cash flow and ended the quarter with $115.8M in cash, cash equivalents and marketable securities.
Negative Updates
Significant QoQ Decline in Reported Recurring Revenue
Q1 recurring revenue was $66.3M versus $94.5M in the prior quarter, a decline of $28.2M (≈29.8% quarter‑over‑quarter). Management attributed the decline to subscriber losses, timing of renewals with certain pay TV customers, and the timing/structure of agreements with SanDisk and Kioxia (which contributed no revenue in Q1).
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Q1-2026 Updates
Positive
Negative
Strong Q1 Revenue, EBITDA and Cash Generation
Reported revenue of $104.8M (also cited as $105M), adjusted EBITDA of $62.3M and an adjusted EBITDA margin of 60%. Generated $58.5M in operating cash flow and ended the quarter with $115.8M in cash, cash equivalents and marketable securities.
Read all positive updates
Company Guidance
Adeia reiterated full‑year 2026 guidance of $395 million to $435 million in revenue, operating expenses of $184 million to $192 million, interest expense of $34 million to $36 million, other income of $5.5 million to $6.5 million, an expected adjusted EBITDA margin of approximately 55%, a non‑GAAP tax rate of 21%, and capital expenditures of about $2 million; management also expects quarterly recurring revenue to grow through the year to roughly $90 million by year‑end and said H1 and H2 should be roughly equal in revenue contribution (with Q2 modestly lower than Q1).Adeia Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 460.49M | 443.39M | 376.02M | 388.79M | 438.93M | 877.70M |
| Gross Profit | 400.56M | 386.76M | 303.25M | 293.51M | 324.71M | 523.74M |
| EBITDA | 253.67M | 239.86M | 206.50M | 237.82M | 269.33M | 235.64M |
| Net Income | 122.03M | 111.08M | 64.62M | 67.37M | -295.88M | -55.46M |
Balance Sheet | ||||||
| Total Assets | 1.00B | 1.04B | 1.10B | 1.11B | 1.21B | 2.47B |
| Cash, Cash Equivalents and Short-Term Investments | 115.76M | 136.73M | 110.39M | 83.57M | 114.56M | 140.96M |
| Total Debt | 29.52M | 435.92M | 485.42M | 595.93M | 736.29M | 772.87M |
| Total Liabilities | 535.82M | 558.76M | 701.39M | 748.93M | 909.11M | 1.13B |
| Stockholders Equity | 466.57M | 480.54M | 396.57M | 356.62M | 301.41M | 1.35B |
Cash Flow | ||||||
| Free Cash Flow | 150.35M | 149.33M | 190.16M | 146.41M | 170.16M | 220.65M |
| Operating Cash Flow | 159.44M | 158.09M | 212.46M | 152.75M | 183.02M | 234.79M |
| Investing Cash Flow | -38.98M | -40.26M | -24.02M | -34.49M | -2.91M | -6.21M |
| Financing Cash Flow | -151.32M | -123.51M | -164.17M | -178.26M | -263.26M | -196.25M |
Adeia Technical Analysis
Positive
28.93
Price Trends
29.16
Positive
24.95
Positive
20.21
Positive
Market Momentum
0.84
Negative
56.88
Neutral
71.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADEA, the sentiment is Positive. The current price of 28.93 is below the 20-day moving average (MA) of 29.19, below the 50-day MA of 29.16, and above the 200-day MA of 20.21, indicating a bullish trend. The MACD of 0.84 indicates Negative momentum. The RSI at 56.88 is Neutral, neither overbought nor oversold. The STOCH value of 71.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADEA.
Adeia Risk Analysis
Adeia disclosed 39 risk factors in its most recent earnings report. Adeia 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
Adeia Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.52B | 28.64 | 27.68% | 1.17% | 21.09% | 61.05% | |
67 Neutral | $1.32B | 15.61 | 17.82% | ― | 22.42% | 51.07% | |
64 Neutral | $1.25B | 44.82 | 3.93% | ― | 8.10% | -73.21% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $1.12B | -125.71 | 32.36% | ― | 13.03% | 7.07% | |
52 Neutral | $614.57M | -8.01 | -9.11% | ― | 23.94% | -630.81% |
* Technology Sector Average
ADEA
Adeia
31.92
18.81
143.42%
PAR
Par Technology
14.90
-47.83
-76.25%
PRGS
Progress Software
31.47
-31.76
-50.23%
PRCH
Porch Group
10.28
-0.97
-8.62%
CXM
Sprinklr
5.34
-2.87
-34.96%
Adeia Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
Adeia Shareholders Approve Governance, Compensation and Equity Plan
Positive
May 8, 2026
At its annual meeting held on May 7, 2026, Adeia stockholders re-elected seven directors to serve until the next annual meeting and approved, on an advisory basis, the compensation of the company’s named executive officers. Investors also ra...
Business Operations and StrategyExecutive/Board Changes
Adeia CEO Paul Davis Plans 2026 Leadership Transition
Neutral
May 4, 2026
Adeia Inc. announced on May 4, 2026, that chief executive officer Paul E. Davis intends to step down from his roles as CEO and board member by the fourth quarter of 2026 to prioritize his health and personal pursuits, though he will remain in plac...
Business Operations and StrategyFinancial DisclosuresLegal Proceedings
Adeia Sues DISH Network While Reaffirming 2026 Outlook
Neutral
Apr 1, 2026
On April 1, 2026, Adeia Inc. announced that its subsidiaries filed a patent infringement lawsuit in the U.S. District Court for the District of Colorado against DISH Network and certain affiliates, alleging unauthorized use of five patents from it...
Business Operations and StrategyLegal Proceedings
Adeia, AMD Sign Multi-Year Semiconductor IP Licensing Deal
Positive
Mar 9, 2026
On March 9, 2026, Adeia announced a multi-year intellectual property license agreement with Advanced Micro Devices, granting AMD access to Adeia’s comprehensive semiconductor IP portfolio. The deal underscores Adeia’s role as a key pro...
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.