One-glance verdict
Within fair range
$306.62 our estimate vs market $326.66
Wall Street consensus: $462.67 (50.9% higher than our fair-value estimate)
7% above our estimate
Fundamentals snapshot
InterDigital, Inc.
IDCC · NMS · Technology · Software - Application
Current price
$326.66
52-week range
$249.14 - $412.60
Market cap
$8.43B
Balance sheet
Healthy
11.53x Adequate
Net cash $710.87M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Returns 26.4% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Reward Dividend yield is 0.9% with 16-year payout history.
- Risk Stock trades 109.5% above its 5-year average P/E.
What this company does
InterDigital, Inc.
InterDigital is a research company that invents and patents the essential technology that powers wireless communication in devices like smartphones and connected cars. Instead of making products, it earns money by licensing (renting out its inventions) to the companies that use this technology, which means it can have very high profit margins (the percentage of each sales dollar kept after paying business costs) since it doesn't have the expense of building factories.
How the company got here
Founded in 1972 as International Mobile Machines Corporation, the company initially aimed to build a portable wireless telephone. After realizing other companies were better equipped to manufacture and sell products, it shifted its strategy to focus on research and development. Over the decades, InterDigital became a key inventor of technologies that are fundamental to wireless communication, contributing to every generation from 2G to 5G. This pivot established its current business model: inventing new technologies, protecting them with patents (legal rights that prevent others from making, using, or selling an invention for a period of time), and then licensing those patents to other companies.
What it actually does
InterDigital is a research and development company that doesn't sell physical products to consumers. Instead, its engineers invent and patent the foundational technologies that make your smartphone, smart TV, and other connected devices work. Think of them as the architects who design the essential communication systems inside your electronics. Companies that manufacture these devices, like Apple and Samsung, pay InterDigital for the right to use its patented inventions. So, while you won't see an InterDigital-branded phone, their technology is likely inside the one you use every day to make calls, stream videos, and connect to the internet.
Patent Licensing
This is the company's primary way of making money. InterDigital's main business is licensing its large portfolio of patents to companies that make and sell electronics. These licenses give manufacturers the legal right to use InterDigital's inventions in their products, which range from smartphones and laptops to connected cars and consumer electronics. In return, these companies pay InterDigital fees, which can be structured as fixed payments, ongoing royalties (a percentage of sales), or large one-time sums. This model generates recurring revenue (income that is expected to continue regularly) as long as companies are producing devices that use these essential technologies.
What management is betting on now
The company is focused on expanding its licensing business beyond just smartphones into new and growing areas. This includes consumer electronics, the Internet of Things (IoT, a network of connected everyday objects), and automobiles. Management is also investing heavily in research for future technologies like 6G, advanced video compression, and artificial intelligence (AI) to ensure it has valuable patents for the next wave of innovation. Their goal is to continue creating essential technologies that will be built into the standards for future products and services, which will fuel their licensing revenue for years to come.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$76.71M
FY2024 Q4
$188.11M
FY2025 Q1
$-34.50M
FY2025 Q2
$104.54M
FY2025 Q3
$395.34M
FY2025 Q4
$63.17M
FY2026 Q1
$15.17M
FY2026 Q2
$80.90M
Revenue
$260.17M
Net income
$116.37M
Diluted EPS
3.40
Operating cash flow
$82.54M
Free cash flow
$80.90M
Fetching…
Sources
Revenue
$205.42M
Net income
$75.33M
Diluted EPS
2.14
Operating cash flow
$16.08M
Free cash flow
$15.17M
Fetching…
Sources
Revenue
$158.23M
Net income
$42.97M
Diluted EPS
1.07
Operating cash flow
$63.39M
Free cash flow
$63.17M
Fetching…
Sources
Revenue
$164.68M
Net income
$67.50M
Diluted EPS
1.93
Operating cash flow
$395.93M
Free cash flow
$395.34M
Fetching…
Sources
Revenue
$300.60M
Net income
$180.57M
Diluted EPS
5.35
Operating cash flow
$105.12M
Free cash flow
$104.54M
Fetching…
Sources
Revenue
$210.51M
Net income
$115.60M
Diluted EPS
3.45
Operating cash flow
$-19.99M
Free cash flow
$-34.50M
Fetching…
Sources
Revenue
$252.80M
Net income
$133.11M
Diluted EPS
4.12
Operating cash flow
$192.03M
Free cash flow
$188.11M
Fetching…
Sources
Revenue
$128.68M
Net income
$34.19M
Diluted EPS
1.14
Operating cash flow
$77.63M
Free cash flow
$76.71M
Fetching…
Sources
Is it cheap or expensive?
Fair value $306.62 vs current price $326.66
Wall Street consensus is the average analyst price target: $462.67 (50.9% higher than our fair-value estimate).
Our most-likely fair value is $306.62 a share — about 6.1% away from today's price of $326.66, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $710.9M - more cash than debt. Interest coverage 11.5x.
Net debt
$-710.87M
Interest coverage
11.53x
InterDigital, Inc.'s profit covers its interest bill about 11.5 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
IDCC
BASELINE
InterDigital, Inc.
Total debt $401.54M Interest coverage 11.53x This is the baseline the peer rows are being compared against.
Total debt $15.27B Interest coverage 18.67x +62% vs IDCC Carries about 1.6x more debt cushion than IDCC.
Total debt $3.85B Interest coverage 3.57x -69% vs IDCC Carries about 3.2x less debt cushion than IDCC.
Total debt — Interest coverage 11.18x -3% vs IDCC Has roughly the same debt cushion as IDCC.
Total debt $21.80M Interest coverage 189.53x +1,543% vs IDCC Carries about 16.4x more debt cushion than IDCC.
Total debt $47.45M Interest coverage 710.57x +6,062% vs IDCC Carries about 61.6x more debt cushion than IDCC.
What you should know
The case for and against IDCC
3 Rewards
1 Risk
Rewards
-
Returns 26.4% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
-
Dividend yield is 0.9% with 16-year payout history.
Risks
-
Stock trades 109.5% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
38.43x
Forward P/E
28.19x
P/B
7.01x
P/S
10.69x
EV/EBITDA
17.96x
PEG ratio
1.32x
Profitability
How much profit each dollar creates
Gross margin
82.5%
Operating margin
53.5%
Net margin
38.3%
ROE
26.4%
ROA
10.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.33x
Current ratio
1.74x
Quick ratio
1.70x
Total debt
$401.54M
Total cash
$1.11B
Growth
How the business has been compounding
Revenue TTM
$788.50M
Revenue 5Y CAGR
18.3%
EPS TTM
8.50
EPS 5Y CAGR
56.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$557.94M
Free CF TTM
$528.56M
FCF margin
67.0%
Dividend
Shareholder payout
Yield
0.9%
Payout ratio
31.8%
Last ex-div date
2026-10-14