InterDigital (IDCC)
Market Price (2/24/2026): $351.35 | Market Cap: $9.0 BilSector: Information Technology | Industry: Communications Equipment
InterDigital (IDCC)
Market Price (2/24/2026): $351.35Market Cap: $9.0 BilSector: Information TechnologyIndustry: Communications Equipment
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.2%, FCF Yield is 5.2% | Meaningful short interestShort Interest Days-to-CoverDTC = (Short Interest Share Quantity) / (Average Daily Trading Volume). Reflects how many days it would take to cover (close out) the short interest based on average volumes. High DTC can signify an increased risk of a short squeeze. is 11.84, Short Interest % of Basic SharesShort Interest % of Basic Shares = (Short Interest Quantity) / (Basic Shares Outstanding). A high fraction of short interest can indicate potential risk of a short squeeze. is 12% | Weak revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is -4.0%, Rev Chg QQuarterly Revenue Change % is -37% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 55% | Key risksIDCC key risks include [1] a heavy dependence on lumpy patent licensing renewals and associated litigation, Show more. | |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 65%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 57% | ||
| Low stock price volatilityVol 12M is 41% | ||
| Megatrend and thematic driversMegatrends include 5G & Advanced Connectivity, and Digital Content & Streaming. Themes include Telecom Infrastructure, Wireless Services, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.2%, FCF Yield is 5.2% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 55% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 65%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 57% |
| Low stock price volatilityVol 12M is 41% |
| Megatrend and thematic driversMegatrends include 5G & Advanced Connectivity, and Digital Content & Streaming. Themes include Telecom Infrastructure, Wireless Services, Show more. |
| Meaningful short interestShort Interest Days-to-CoverDTC = (Short Interest Share Quantity) / (Average Daily Trading Volume). Reflects how many days it would take to cover (close out) the short interest based on average volumes. High DTC can signify an increased risk of a short squeeze. is 11.84, Short Interest % of Basic SharesShort Interest % of Basic Shares = (Short Interest Quantity) / (Basic Shares Outstanding). A high fraction of short interest can indicate potential risk of a short squeeze. is 12% |
| Weak revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is -4.0%, Rev Chg QQuarterly Revenue Change % is -37% |
| Key risksIDCC key risks include [1] a heavy dependence on lumpy patent licensing renewals and associated litigation, Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Significant Year-over-Year Revenue Decline in Q4 2025 Despite Earnings Beat.
While InterDigital exceeded Q4 2025 earnings per share (EPS) estimates by $1.10, reporting $2.12 versus a $1.02 estimate, and surpassed revenue estimates with $158.2 million against an anticipated $153.6 million, the quarterly revenue still represented a substantial 37.4% decrease compared to the $252.8 million in the year-ago quarter. This decline was primarily attributed to a sharp reduction in "catch-up revenue," which fell from $135.8 million in Q4 2024 to $12.6 million in Q4 2025. This significant year-over-year revenue drop likely overshadowed the earnings beat for some investors.
2. Substantial Insider Selling Activity.
Multiple insiders engaged in significant stock sales during the period since October 31, 2025. The President and CEO, Lawrence Liren Chen, sold shares totaling approximately $9.55 million over the past six months (as of February 5, 2026), with individual sales ranging from $903,715 to $1,951,959.96. The Chief Financial Officer, Richard Brezski, also executed sales exceeding $5 million, with transactions totaling approximately $6 million from January 6, 2026, to February 10, 2026. Cumulatively, insiders offloaded approximately $11.9 million of stock in the 90 days leading up to February 9, 2026. Such considerable insider selling can negatively influence investor confidence.
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Stock Movement Drivers
Fundamental Drivers
The -2.7% change in IDCC stock from 10/31/2025 to 2/23/2026 was primarily driven by a -10.2% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 10312025 | 2232026 | Change |
|---|---|---|---|
| Stock Price ($) | 361.15 | 351.50 | -2.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 929 | 834 | -10.2% |
| Net Income Margin (%) | 53.5% | 48.8% | -8.9% |
| P/E Multiple | 18.8 | 22.2 | 18.6% |
| Shares Outstanding (Mil) | 26 | 26 | 0.3% |
| Cumulative Contribution | -2.7% |
Market Drivers
10/31/2025 to 2/23/2026| Return | Correlation | |
|---|---|---|
| IDCC | -2.7% | |
| Market (SPY) | 0.0% | 25.8% |
| Sector (XLK) | -7.9% | 31.0% |
Fundamental Drivers
The 36.7% change in IDCC stock from 7/31/2025 to 2/23/2026 was primarily driven by a 54.7% change in the company's P/E Multiple.| (LTM values as of) | 7312025 | 2232026 | Change |
|---|---|---|---|
| Stock Price ($) | 257.10 | 351.50 | 36.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 893 | 834 | -6.6% |
| Net Income Margin (%) | 51.9% | 48.8% | -6.1% |
| P/E Multiple | 14.4 | 22.2 | 54.7% |
| Shares Outstanding (Mil) | 26 | 26 | 0.8% |
| Cumulative Contribution | 36.7% |
Market Drivers
7/31/2025 to 2/23/2026| Return | Correlation | |
|---|---|---|
| IDCC | 36.7% | |
| Market (SPY) | 8.3% | 33.5% |
| Sector (XLK) | 5.6% | 36.2% |
Fundamental Drivers
The 94.0% change in IDCC stock from 1/31/2025 to 2/23/2026 was primarily driven by a 32.9% change in the company's Net Income Margin (%).| (LTM values as of) | 1312025 | 2232026 | Change |
|---|---|---|---|
| Stock Price ($) | 181.14 | 351.50 | 94.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 721 | 834 | 15.6% |
| Net Income Margin (%) | 36.7% | 48.8% | 32.9% |
| P/E Multiple | 17.2 | 22.2 | 29.1% |
| Shares Outstanding (Mil) | 25 | 26 | -2.2% |
| Cumulative Contribution | 94.0% |
Market Drivers
1/31/2025 to 2/23/2026| Return | Correlation | |
|---|---|---|
| IDCC | 94.0% | |
| Market (SPY) | 14.4% | 39.4% |
| Sector (XLK) | 20.6% | 41.3% |
Fundamental Drivers
The 423.2% change in IDCC stock from 1/31/2023 to 2/23/2026 was primarily driven by a 165.3% change in the company's Net Income Margin (%).| (LTM values as of) | 1312023 | 2232026 | Change |
|---|---|---|---|
| Stock Price ($) | 67.19 | 351.50 | 423.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 453 | 834 | 84.3% |
| Net Income Margin (%) | 18.4% | 48.8% | 165.3% |
| P/E Multiple | 24.0 | 22.2 | -7.2% |
| Shares Outstanding (Mil) | 30 | 26 | 15.3% |
| Cumulative Contribution | 423.2% |
Market Drivers
1/31/2023 to 2/23/2026| Return | Correlation | |
|---|---|---|
| IDCC | 423.2% | |
| Market (SPY) | 74.1% | 39.3% |
| Sector (XLK) | 107.9% | 36.7% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| IDCC Return | 20% | -29% | 124% | 81% | 66% | 13% | 547% |
| Peers Return | 42% | -27% | 23% | 30% | 8% | 3% | 86% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 1% | 84% |
Monthly Win Rates [3] | |||||||
| IDCC Win Rate | 58% | 33% | 50% | 67% | 58% | 100% | |
| Peers Win Rate | 69% | 35% | 54% | 65% | 54% | 70% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| IDCC Max Drawdown | 0% | -43% | 0% | -11% | -11% | -4% | |
| Peers Max Drawdown | -6% | -38% | -5% | -6% | -15% | -7% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -1% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: CSCO, QCOM, MSI, FFIV, VISN. See IDCC Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 2/23/2026 (YTD)
How Low Can It Go
| Event | IDCC | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -52.5% | -25.4% |
| % Gain to Breakeven | 110.5% | 34.1% |
| Time to Breakeven | 249 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -46.9% | -33.9% |
| % Gain to Breakeven | 88.4% | 51.3% |
| Time to Breakeven | 141 days | 148 days |
| 2018 Correction | ||
| % Loss | -53.7% | -19.8% |
| % Gain to Breakeven | 115.9% | 24.7% |
| Time to Breakeven | 1,564 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -53.5% | -56.8% |
| % Gain to Breakeven | 115.1% | 131.3% |
| Time to Breakeven | 977 days | 1,480 days |
Compare to CSCO, QCOM, MSI, FFIV, VISN
In The Past
InterDigital's stock fell -52.5% during the 2022 Inflation Shock from a high on 6/8/2021. A -52.5% loss requires a 110.5% gain to breakeven.
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About InterDigital (IDCC)
AI Analysis | Feedback
Here are 1-3 brief analogies to describe InterDigital (IDCC):
Like Dolby Labs, but for fundamental wireless and video communication standards.
The ARM Holdings for wireless communication and video coding patents.
AI Analysis | Feedback
- Patent Licensing: InterDigital licenses its extensive portfolio of essential wireless and video technology patents to device manufacturers and network providers globally.
- Wireless Technology Research & Development: The company develops foundational technologies for cellular (5G, 6G), Wi-Fi, and IoT communications, which contribute to global standards.
- Video Technology Research & Development: InterDigital innovates in advanced video coding, compression, and streaming technologies used in various multimedia applications.
AI Analysis | Feedback
InterDigital (symbol: IDCC) primarily sells its intellectual property and technologies to other companies, operating on a Business-to-Business (B2B) model. Its major customers are technology companies, particularly manufacturers of cellular-enabled products such as smartphones, tablets, and IoT devices, that license InterDigital's extensive patent portfolio.
Based on public announcements and its business model, some of InterDigital's major customer companies (licensees) include:
- Samsung Electronics Co., Ltd. (KRX: 005930) - A global leader in consumer electronics, including smartphones, televisions, and home appliances.
- LG Electronics Inc. (KRX: 066570) - A South Korean multinational electronics company that manufactures a wide range of products, including home appliances and mobile devices.
- Xiaomi Corporation (HKEX: 1810) - A prominent global smartphone and smart home device manufacturer, with whom InterDigital announced a global patent license agreement in August 2023.
- OPPO (private company) - A leading global smartphone brand, known for its mobile technology and devices, with whom InterDigital announced a global patent license agreement in November 2022.
- Sony Group Corporation (NYSE: SONY, TYO: 6758) - A global technology and entertainment conglomerate, covering areas from consumer electronics to professional solutions, with whom InterDigital announced a multi-year patent license agreement in April 2024.
AI Analysis | Feedback
nullAI Analysis | Feedback
Liren Chen, President and Chief Executive Officer
Liren Chen was appointed President and Chief Executive Officer of InterDigital in April 2021. Prior to joining InterDigital, Mr. Chen spent nearly 25 years at Qualcomm Inc. where he most recently served as Senior Vice President and Global Head of IP, Legal Counsel. In this role, he was responsible for overseeing Qualcomm's worldwide intellectual property portfolio and leading technology, business strategy, product management, and global eco-system development for Qualcomm Technology Licensing. He holds 28 granted patents in the U.S. and over 120 granted patents worldwide.
Richard J. Brezski, EVP, Chief Financial Officer and Treasurer
Richard J. Brezski is InterDigital's Chief Financial Officer and Treasurer, a role he assumed in May 2012. He is responsible for overseeing the company's finance, accounting, audit, tax, treasury, and facilities functions. Mr. Brezski joined InterDigital in May 2003 as Director and Controller. Before his tenure at InterDigital, he worked as an audit manager for PwC in their technology, information, communications, and entertainment practice.
Joshua D. Schmidt, EVP, Chief Legal Officer and Corporate Secretary
Joshua D. Schmidt is InterDigital's Chief Legal Officer and Corporate Secretary, responsible for managing the company's legal functions. He joined InterDigital in March 2015 and has served in various roles within the legal department, focusing on M&A, corporate governance, and commercial contracting. Before joining InterDigital, Mr. Schmidt was an associate at Dechert LLP, where his practice focused on private and public company M&A, securities offerings, venture capital transactions, and joint ventures.
Rajesh Pankaj, EVP, Chief Technology Officer
Rajesh Pankaj joined InterDigital in July 2022 as EVP, Chief Technology Officer. Prior to InterDigital, he spent 25 years at Qualcomm, where he oversaw research in 5G, 4G LTE, augmented reality, and other technologies. His most recent role at Qualcomm was Senior Vice President of Engineering and Head of Corporate R&D, where he managed a global team focused on artificial intelligence, edge computing, and new technologies.
Michael G. Cortino, EVP, Chief Information Officer
Michael G. Cortino has served as InterDigital's EVP, Chief Information Officer since 2020. Before joining InterDigital, he was the Vice President of IT at Tenneco, Inc. Mr. Cortino also held leadership positions at Mars Inc, VWR International, Avantor, and Johnson Controls (formerly Tyco International).
AI Analysis | Feedback
- Dependence on Patent Licensing Revenue, Contract Renewals, and Associated Litigation: InterDigital's business model is heavily reliant on revenue generated from patent licensing agreements. This creates significant vulnerability due to the inherent "lumpiness" of revenue tied to contract renewals and the potential for costly and lengthy legal disputes over intellectual property rights and enforcement. The company's financial success is susceptible to disruptions in its ability to negotiate and renew these agreements, especially with a concentrated set of large licensees.
- Technological Disruption and the Need for Standards Adoption: Operating in a rapidly evolving technology sector, InterDigital faces the constant threat of technological disruption. New technologies developed by competitors could render its existing patents less valuable or even obsolete. Furthermore, InterDigital's future growth and the commercial value of its patents are contingent upon the successful adoption of its research into new global industry standards, such as 6G or next-generation video codecs. A failure to shape or keep pace with these standards could severely impact its market position and revenue generation capabilities.
- Market Concentration and Geopolitical Risks: InterDigital's financial performance is significantly exposed to market concentration risks, particularly its reliance on key markets like China for a substantial portion of its revenue. This dependency exposes the company to potential geopolitical tensions and adverse regulatory changes in these regions, which could impact its licensing agreements and overall revenue generation.
AI Analysis | Feedback
The European Commission's proposed regulation on Standard Essential Patents (SEPs) represents a clear emerging threat. This legislative initiative, which is currently under consideration, aims to introduce a central database for SEPs, mandatory essentiality checks, and a mechanism for offering opinions on aggregate royalty rates before litigation. If enacted in its current form or with similar provisions, it could fundamentally alter the economics of SEP licensing within the European Union by potentially reducing royalty rates, increasing administrative burdens and costs for licensors like InterDigital, and shifting negotiating leverage towards implementers. This systemic change in the regulatory landscape could directly impact InterDigital's core business model of patent licensing.
AI Analysis | Feedback
InterDigital (symbol: IDCC) operates primarily in the research, development, and licensing of foundational technologies across wireless, video, and Internet of Things (IoT) domains. The addressable markets for their main products and services, primarily patent licensing for these technologies, are substantial globally.
Wireless Technologies (5G)
InterDigital is a pioneer in wireless communication technologies, including 5G solutions, and holds an extensive patent portfolio in this area. The global 5G technology market is projected to reach significant figures:
- The global 5G technology market size is estimated at USD 195.43 billion in 2025 and is expected to reach USD 457.95 billion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 18.57% during this period.
- Another estimate places the global 5G technology market size at USD 42.45 billion in 2025, expanding to USD 2,187.85 billion in 2035, with an incredibly high CAGR of 48.33%.
- The 5G infrastructure market, a component of the broader 5G market, was estimated at USD 16.72 billion in 2024 and is anticipated to reach approximately USD 131.77 billion by 2034, with a CAGR of 22.93% from 2025 to 2034.
Regionally, North America is expected to dominate the 5G market, holding approximately 40% of the global share, driven by strong demand and investments. Asia-Pacific is also a major and fast-growing market, propelled by urbanization and technological adoption.
Video Technologies (Video Coding/Compression)
InterDigital is a leader in video compression and delivery technologies, including advanced video codec technologies. These technologies are crucial for high-quality video streaming and efficient content delivery.
- The global advanced video coding market is expected to reach an estimated USD 4.8 billion by 2030, with a CAGR of 4.3% from 2024 to 2030.
- Within the media and entertainment sector, the market for advanced video codecs is predicted to reach USD 2.4 billion by 2030, driven by royalties from patent pools.
- The global next-generation video codec market is expected to reach an estimated USD 12.1 billion by 2031, growing at a CAGR of 28.9% from 2025 to 2031.
- The AI Audio and Video System-on-Chip (SoC) market, which includes AI-powered video compression technologies that InterDigital works on, was valued at USD 17.05 billion in 2024 and is projected to grow from USD 25.49 billion in 2025 to USD 952.07 billion by 2034, at a staggering CAGR of 49.5%.
North America is expected to witness the highest growth in the advanced video coding market due to the rising popularity of video streaming services and the presence of key players.
Internet of Things (IoT) Connectivity
InterDigital develops solutions for connecting devices in the IoT ecosystem and has been expanding its presence in this space. The IoT market encompasses a vast array of connected devices and systems.
- The global Internet of Things (IoT) market size is estimated at USD 1.35 trillion in 2025 and is expected to reach USD 2.72 trillion by 2030, with a CAGR of 15.04%.
- Another report values the global IoT market at USD 1,425.58 billion in 2024, with projections to reach USD 5,372.46 billion by 2034, demonstrating a CAGR of 14.1%.
- The IoT market is also expected to reach approximately USD 3,454.2 billion by 2033, growing from USD 492.7 billion in 2023 at a CAGR of 21.5%.
North America consistently holds the largest market share in the global IoT market, driven by a strong technology infrastructure, high internet penetration, and early adoption of IoT solutions. The Asia-Pacific region is projected to be the fastest-growing market for IoT.
AI Analysis | Feedback
InterDigital (IDCC) is poised for future revenue growth over the next 2-3 years, driven by several strategic initiatives and market trends. Here are the key expected drivers:- Expansion of Smartphone Licensing Agreements: InterDigital has significantly increased its market penetration in smartphone licensing, now covering approximately 85% of the global smartphone market with agreements including major players like Samsung, OPPO, Vivo, Lenovo, and Honor. The company's successful Samsung arbitration and new licensing deals have substantially boosted its Annualized Recurring Revenue (ARR) from the smartphone program, nearing its midterm goal of $500 million in recurring smartphone revenue by 2027.
- Growth in Annualized Recurring Revenue (ARR): A strategic shift towards a more predictable, fixed-fee licensing model has resulted in robust growth in Annualized Recurring Revenue. The company reported a 49% year-over-year increase in ARR, reaching an all-time high of $588 million in Q3 2025, providing a stable and growing foundation for future revenues.
- Penetration into New Markets: Beyond smartphones, InterDigital is actively expanding its licensing efforts into other high-growth verticals, including Consumer Electronics (CE), Internet of Things (IoT), and the Automotive sector. The company aims to more than double its ARR from CE and IoT by 2030, indicating a clear focus on diversifying its revenue streams.
- Leadership in Next-Generation Wireless Technology (6G) and AI Integration: InterDigital is making significant investments in research and development for next-generation wireless technologies, particularly 6G, and is emphasizing the integration of artificial intelligence (AI) into its wireless and video technology. This proactive R&D ensures the company remains at the forefront of innovation, positioning it for future licensing opportunities as new standards and technologies emerge.
AI Analysis | Feedback
Share Repurchases
- InterDigital returned $53.3 million to shareholders in Q3 2025, with $35.3 million allocated to share repurchases. In October 2025, an additional $15 million in stock was bought back, bringing the year-to-date total capital returned to more than $130 million.
- In Q2 2025, share buybacks amounted to $26.2 million.
- Over the last three-plus years, the company has repurchased more than half a billion dollars in stock and anticipates continuing share buybacks through the remainder of the year.
Share Issuance
- InterDigital's 3.50% Senior Convertible Notes due 2027 are convertible during the calendar quarter ending December 31, 2025, at a current conversion rate of 12.9041 shares per $1,000 principal amount of the Notes.
- The company entered into call spread transactions at the time of issuing the 2027 Notes, designed to economically reduce the net number of shares issued upon conversion by increasing the effective conversion price from $77.49 to $106.06.
- The number of outstanding shares was 25,917,000 as of November 2025.
Outbound Investments
- InterDigital acquired the AI startup Deep Render on October 30, 2025.
Capital Expenditures
- InterDigital operates with minimal capital intensity, with capital expenditures under $5 million for the first quarter of 2025, allowing most of its cash flow to support shareholder returns or research and development.
- The company's capital allocation priorities include investing organically in research and IP portfolio development.
Latest Trefis Analyses
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| 01302026 | ROP | Roper Technologies | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -9.6% | -9.6% | -15.0% |
| 01302026 | TDC | Teradata | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -1.4% | -1.4% | -8.7% |
| 01302026 | CVLT | CommVault Systems | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | -0.8% | -0.8% | -5.1% |
| 01302026 | NTNX | Nutanix | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | -5.0% | -5.0% | -6.3% |
| 01302026 | FICO | Fair Isaac | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | -12.4% | -12.4% | -12.4% |
| 11142025 | IDCC | InterDigital | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 1.1% | 1.1% | -12.0% |
| 04302025 | IDCC | InterDigital | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 91.4% | 76.1% | 0.0% |
| 09302022 | IDCC | InterDigital | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | 82.8% | 102.9% | 0.0% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 204.96 |
| Mkt Cap | 77.2 |
| Rev LTM | 8,491 |
| Op Inc LTM | 1,874 |
| FCF LTM | 1,717 |
| FCF 3Y Avg | 1,462 |
| CFO LTM | 1,872 |
| CFO 3Y Avg | 1,612 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 8.9% |
| Rev Chg 3Y Avg | 4.4% |
| Rev Chg Q | 8.5% |
| QoQ Delta Rev Chg LTM | 2.1% |
| Op Mgn LTM | 25.2% |
| Op Mgn 3Y Avg | 24.4% |
| QoQ Delta Op Mgn LTM | -0.1% |
| CFO/Rev LTM | 26.6% |
| CFO/Rev 3Y Avg | 25.6% |
| FCF/Rev LTM | 24.7% |
| FCF/Rev 3Y Avg | 24.2% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 77.2 |
| P/S | 5.2 |
| P/EBIT | 19.7 |
| P/E | 27.8 |
| P/CFO | 17.1 |
| Total Yield | 5.2% |
| Dividend Yield | 0.9% |
| FCF Yield 3Y Avg | 5.4% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 4.1% |
| 3M Rtn | 2.2% |
| 6M Rtn | -2.2% |
| 12M Rtn | 2.7% |
| 3Y Rtn | 79.1% |
| 1M Excs Rtn | 4.8% |
| 3M Excs Rtn | -0.7% |
| 6M Excs Rtn | -9.7% |
| 12M Excs Rtn | -10.6% |
| 3Y Excs Rtn | 10.9% |
Comparison Analyses
Price Behavior
| Market Price | $351.50 | |
| Market Cap ($ Bil) | 9.1 | |
| First Trading Date | 03/26/1990 | |
| Distance from 52W High | -11.2% | |
| 50 Days | 200 Days | |
| DMA Price | $334.98 | $298.50 |
| DMA Trend | up | down |
| Distance from DMA | 4.9% | 17.8% |
| 3M | 1YR | |
| Volatility | 47.4% | 41.5% |
| Downside Capture | 115.68 | 69.79 |
| Upside Capture | 113.06 | 112.74 |
| Correlation (SPY) | 20.2% | 41.1% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -1.32 | 0.02 | 0.97 | 1.33 | 0.89 | 0.88 |
| Up Beta | 0.19 | -0.01 | 1.03 | 2.36 | 0.92 | 0.97 |
| Down Beta | -3.07 | -0.83 | 0.53 | 0.35 | 0.76 | 0.66 |
| Up Capture | 6% | 9% | 75% | 180% | 135% | 156% |
| Bmk +ve Days | 11 | 22 | 34 | 71 | 142 | 430 |
| Stock +ve Days | 10 | 18 | 27 | 65 | 127 | 395 |
| Down Capture | -67% | 103% | 143% | 123% | 79% | 89% |
| Bmk -ve Days | 9 | 19 | 27 | 54 | 109 | 321 |
| Stock -ve Days | 10 | 23 | 34 | 60 | 124 | 354 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with IDCC | |
|---|---|---|---|---|
| IDCC | 63.9% | 41.4% | 1.29 | - |
| Sector ETF (XLK) | 15.4% | 27.6% | 0.50 | 43.7% |
| Equity (SPY) | 12.8% | 19.4% | 0.50 | 41.2% |
| Gold (GLD) | 79.1% | 25.7% | 2.25 | 5.0% |
| Commodities (DBC) | 7.7% | 16.9% | 0.27 | 12.2% |
| Real Estate (VNQ) | 6.6% | 16.7% | 0.21 | 19.9% |
| Bitcoin (BTCUSD) | -30.9% | 44.9% | -0.69 | 13.6% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with IDCC | |
|---|---|---|---|---|
| IDCC | 41.2% | 34.4% | 1.07 | - |
| Sector ETF (XLK) | 15.8% | 24.8% | 0.58 | 44.4% |
| Equity (SPY) | 13.2% | 17.0% | 0.61 | 46.9% |
| Gold (GLD) | 23.6% | 17.1% | 1.12 | 9.1% |
| Commodities (DBC) | 10.7% | 19.0% | 0.45 | 11.2% |
| Real Estate (VNQ) | 5.1% | 18.8% | 0.18 | 34.3% |
| Bitcoin (BTCUSD) | 6.7% | 57.1% | 0.34 | 19.7% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with IDCC | |
|---|---|---|---|---|
| IDCC | 25.6% | 34.6% | 0.75 | - |
| Sector ETF (XLK) | 22.9% | 24.2% | 0.86 | 50.1% |
| Equity (SPY) | 15.7% | 17.9% | 0.75 | 55.2% |
| Gold (GLD) | 15.1% | 15.6% | 0.81 | 5.7% |
| Commodities (DBC) | 8.5% | 17.6% | 0.40 | 19.5% |
| Real Estate (VNQ) | 6.9% | 20.7% | 0.30 | 43.5% |
| Bitcoin (BTCUSD) | 67.8% | 66.8% | 1.07 | 15.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 10/30/2025 | 3.5% | 0.8% | -8.2% |
| 7/31/2025 | 5.3% | 10.2% | 11.6% |
| 5/1/2025 | 0.6% | 5.7% | 8.1% |
| 2/6/2025 | 16.0% | 15.1% | 18.0% |
| 10/31/2024 | 1.8% | 20.0% | 32.7% |
| 8/1/2024 | 11.5% | 11.1% | 11.3% |
| 1/16/2024 | 0.5% | 3.6% | -0.8% |
| 11/2/2023 | 8.6% | 11.9% | 32.3% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 17 | 14 | 14 |
| # Negative | 6 | 9 | 9 |
| Median Positive | 3.5% | 9.6% | 11.4% |
| Median Negative | -3.1% | -3.4% | -4.6% |
| Max Positive | 16.0% | 26.8% | 32.7% |
| Max Negative | -5.5% | -10.6% | -36.1% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 12/31/2025 | 02/05/2026 | 10-K |
| 09/30/2025 | 10/30/2025 | 10-Q |
| 06/30/2025 | 07/31/2025 | 10-Q |
| 03/31/2025 | 05/01/2025 | 10-Q |
| 12/31/2024 | 02/06/2025 | 10-K |
| 09/30/2024 | 10/31/2024 | 10-Q |
| 06/30/2024 | 08/01/2024 | 10-Q |
| 03/31/2024 | 05/02/2024 | 10-Q |
| 12/31/2023 | 02/15/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/03/2023 | 10-Q |
| 03/31/2023 | 05/04/2023 | 10-Q |
| 12/31/2022 | 02/15/2023 | 10-K |
| 09/30/2022 | 11/03/2022 | 10-Q |
| 06/30/2022 | 08/04/2022 | 10-Q |
| 03/31/2022 | 05/05/2022 | 10-Q |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Schmidt, Joshua D | CLO & Corp Secretary | Direct | Sell | 12312025 | 325.34 | 466 | 151,608 | 8,934,459 | Form |
| 2 | Chen, Lawrence Liren | President and CEO | Direct | Sell | 12312025 | 329.50 | 2,975 | 980,262 | 59,263,873 | Form |
| 3 | Chen, Lawrence Liren | President and CEO | Direct | Sell | 12312025 | 325.34 | 2,975 | 967,886 | 57,547,769 | Form |
| 4 | Kritzmacher, John A | Direct | Sell | 12232025 | 331.00 | 1,250 | 413,750 | 5,234,676 | Form | |
| 5 | Kritzmacher, John A | Direct | Sell | 12102025 | 357.37 | 1,250 | 446,712 | 6,098,422 | Form |
IDCC Trade Sentinel
Core Investment Debate
Lumpy Growth vs. Recurring Power
BULL VIEW
ARR growth, new CE/IoT deals (LG, HP), and licensing 85% of the smartphone market proves the model is expanding and durable, making headline revenue lumpiness irrelevant.
CORE TENSION
Bears see a 13% FY26 revenue decline due to lapping one-time payments. Bulls focus on the 24% YoY growth in Annualized Recurring Revenue (ARR) as the true health indicator.
PREVAILING SENTIMENT
The 24% YoY growth in ARR to $582M as of Q4 2025 is the key metric, demonstrating underlying strength despite the forecasted decline in total revenue for FY2026.
BEAR VIEW
Sequential ARR stalled (Q3 to Q4 2025), renewal of expired ARR is incomplete, and rising litigation costs against major players (Amazon/Disney) will compress margins.
| Timeline | Event & Metric To Watch |
|---|---|
Late April 2026 | Q1 2026 Earnings Report Watch: Annualized Recurring Revenue (ARR) growth trend and status of the remaining ~$30M in expired contracts under negotiation. |
Anytime (Court Rulings / Settlement News) | Litigation Update vs. Amazon/Disney Watch: Rulings on patent validity, injunctions, or news of a settlement. Watch for litigation expense guidance in quarterly reports. |
Ongoing | New Major Licensing Agreement Announcement Watch: Announcement of a new license with a major, previously unlicensed, device maker in CE, IoT, or Auto. |
Next 6 Months | Major Licensee End-Market Report Watch: Downward revisions to 2026 shipment forecasts from key licensees (e.g., Samsung, Apple, Xiaomi) citing weak consumer demand. |
| Date | Event | Stock Impact |
|---|---|---|
Oct 21, 2025 | New Licensing and Renewal Agreements Details: Announced a patent license renewal with Sharp and a new agreement with an EV charger manufacturer, demonstrating continued momentum in both core and expansion markets. | Flat (0.32%) $370.17 -> $371.34 |
Oct 30, 2025 | Q3 2025 Earnings Report Details: Reported strong Q3 results, beating analyst estimates for both revenue and EPS. Highlighted a 49% YoY increase in Annualized Recurring Revenue to an all-time high of $588M. | Rose significantly by 3.53% $382.01 -> $395.48 |
Nov 10, 2025 | Initiates Patent Litigation Against Amazon Details: Announced multi-jurisdictional litigation against Amazon over infringement of video compression and HDR patents used in FireTV, Kindle, and Prime Video services. | Slight -1.37% pullback $369.24 -> $364.18 |
Jan 13, 2026 | Announced Q4 2025 Earnings Date Details: The company announced it would release its Q4 2025 financial results on February 5, 2026. The stock reaction was muted. | Flat (0.66%) $311.31 -> $313.36 |
Jan 20, 2026 | New License Agreement with LG Electronics Details: Announced a new patent license agreement with LG Electronics, covering digital TVs and computer display monitors, expanding its presence in the Consumer Electronics market. | Surged +5.54% $308.76 -> $325.88 |
Feb 5, 2026 | Q4 2025 Earnings & FY2026 Guidance Details: Reported a beat on EPS and Revenue. Provided lower FY26 revenue guidance ($675M-$775M) but strong Q1'26 guidance and highlighted 24% YoY growth in ARR. Stock reacted very positively. | Surged +9.93% $313.87 -> $345.05 |
Position Sizing
4% - 6%
NORMAL
Fundamentals are excellent (Bullish sentiment, Widening Moat, High Visibility). However, the 'Explosive' volatility regime (45% absolute, 4.1x S&P) forces a cap on size. This is a Bucket A fundamental case capped by Bucket C volatility.
Diversification Alternatives
RMBS
INDUSTRYUnlike IDCC's concentrated licensee risk, Rambus has a broader customer base across data centers and servers. Its growth is tied to the durable DDR5 memory upgrade cycle.
NOK
SECTOROffers a much lower valuation entry point into the IP licensing space. Provides diversification with its network infrastructure business, which could recover with 5G enterprise adoption.
Stock Conviction
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The probability-adjusted skew of 2.85x is highly attractive and falls squarely in Tier 1. The investment thesis rests on a resilient competitive moat that is widening due to dominance in core segments and successful expansion into new verticals. The identified primary risk (litigation costs) is a known factor and is considered friction rather than a thesis-killer, creating an asymmetric risk/reward profile heavily skewed to the upside, justifying an OVERWEIGHT rating.
STOCK ARCHETYPE
Mature Cash CowInterDigital fits the 'Mature Cash Cow' archetype due to its high and defensible margins (>50% adj. EBITDA), strong free cash flow conversion, and established position in the mature smartphone market. The business model is built on a regulatory moat of essential patents, providing high-quality, recurring revenue streams, aligning with the focus on Capital Efficiency and Pricing Power.
INVESTMENT THESIS
The primary driver for shareholder return is the successful expansion and monetization of InterDigital's patent portfolio beyond the mature smartphone market into higher-growth verticals like Consumer Electronics (CE), Internet of Things (IoT), and Automotive. Recent contract wins with major players like HP and LG validate this strategy, proving the addressable market is a serviceable reality, not a theoretical concept.
- Annualized Recurring Revenue (ARR) grew 24% year-over-year to $582 million as of Q4 2025.
- Over 50 license agreements signed since 2021, representing over $4.6 billion in contract value.
- Recent new licensee wins in expansion markets, including HP (PCs) and LG Electronics (Consumer Electronics).
- Management has a stated target of reaching $1B in ARR by 2030, suggesting a durable growth runway.
PRIMARY RISK
The primary risk to the thesis is not a decline in demand, but self-inflicted margin erosion from escalating, and potentially unsuccessful, litigation against major video streaming providers like Amazon and Disney. Management has explicitly guided for litigation costs to remain elevated or increase from the recent high of $19M in Q4 2025, creating a direct headwind to EPS growth and a source of outcome uncertainty.
- Litigation costs hit a recent high of approximately $19M in Q4 2025.
- Management guided for litigation expenses to remain elevated or increase in 2026.
- The risk is classified as 'Structural Impact' because an adverse ruling on video SEPs could permanently impair a key growth vector.
| KPI | Threshold | Rationale |
|---|---|---|
| Annualized Recurring Revenue (ARR) | Sustained >20% YoY Growth | This is the primary leading indicator of the company's health, stripping out the noise of lumpy catch-up payments and proving the expansion thesis is on track. |
| Quarterly Litigation Expense | Below $25 Million | Tracks the severity of the 'Anti-Alpha' risk. A sustained breach above this level would signal costs are spiraling and likely to trigger EPS misses and multiple compression. |
| New Major Non-Smartphone Licensee Announcements | At least 1-2 per year | Qualitative check on the execution of the Alpha Driver. These announcements provide tangible proof that the company is successfully penetrating the CE, IoT, and Automotive TAMs. |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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