IDCC  Interdigital Inc.

Exchange

NASDAQ

Sector

Miscellaneous

Industry

Multi-Sector Companies

Market Cap.

2.57B

Vuru Grade

85.41/100

Current Price

$74.15
+0.80 (+1.09%)

Growth Price

$97.49
Undervalued by 31.48%

Stability Price

$41.85
Overvalued by 43.57%

Company Metrics

  • P/E 8.09
  • P/S 3.57
  • P/B 3.21
  • EPS 9.17
  • Cash ROIC 62.42%
  • Cash Ratio 2.24
  • Dividend 1.4 / 1.93%
  • Avg. Vol. 294,549.00
  • Shares 34.66M
  • Market Cap. 2.57B

Company Description

Interdigital, Inc. engages in the design and development of digital wireless technology solutions. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. It holds patents related to the fundamental technologies that enable wireless communications. The company licenses its patents to e... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

InterDigital Issues Revenue Guidance for Fourth Quarter 2017
GlobeNewswire (press release) - Nov 13, 2017
WILMINGTON, Del., Nov. 13, 2017 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile technology research and development company, today announced that it expects its total fourth quarter 2017 revenue to be between $155 million and ...
InterDigital, Inc. (NASDAQ:IDCC) Position Increased by State of Tennessee ...
The Ledger Gazette - 20 hours ago
InterDigital logo State of Tennessee Treasury Department raised its position in InterDigital, Inc. (NASDAQ:IDCC) by 10.0% during the 3rd quarter, according to its most recent filing with the Securities and Exchange Commission (SEC).
American Century Companies Inc. Trims Position in InterDigital, Inc. (IDCC) - The Lincolnian Online
FY2018 EPS Estimates for InterDigital, Inc. (IDCC) Decreased by Dougherty & Co - Week Herald
InterDigital Wins IDTechEX Best IoT Technology Development Award for ...
GlobeNewswire (press release) - Nov 16, 2017
WILMINGTON, Del., Nov. 16, 2017 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile technology research and development company, today announced that it has received the Best IoT Technology Development Award from IDTechEX ...
InterDigital: A Well-Established Company In A Promising Industry With Very ...
Seeking Alpha - Nov 14, 2017
InterDigital is an interesting company with a firm position in a growing industry, but the market doesn't seem to pay much attention.
At $71.5, Is It Time To Buy InterDigital Inc (IDCC)? - Simply Wall St
InterDigital, Inc. (IDCC) Shares Bought by Sigma Planning Corp - Dispatch Tribunal
InterDigital Named Among the 20 Most Promising Smart City Solution Providers ...
GlobeNewswire (press release) - Oct 24, 2017
WILMINGTON, Del., Oct. 24, 2017 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile technology research and development company, today announced that CIOReview has named InterDigital in its 2017 20 Most Promising Smart City ...
InterDigital, Inc. (NASDAQ:IDCC) Shares Sold by Seizert Capital Partners LLC
The Ledger Gazette - Nov 20, 2017
InterDigital logo Seizert Capital Partners LLC decreased its position in shares of InterDigital, Inc. (NASDAQ:IDCC) by 10.7% during the third quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission.
SignalPoint Asset Management LLC Purchases Shares of 6162 InterDigital, Inc ... - Dispatch Tribunal
FDx Advisors Inc. Invests $416000 in InterDigital, Inc. (IDCC) - The Lincolnian Online
InterDigital reports Q3 results, end of Taiwan FTC investigation
Seeking Alpha - Oct 26, 2017
Key metrics: Recurring revenue, $88.5M (+5%); operating expenses, $56.5M (+9%, primarily due to Hillcrest Labs acquisition); fixed-fee amortized royalties, 88% of current patent royalties (+32%); cash from operating activities, $104.7M; FCF, $94.9M ...
Can InterDigital, Inc. (NasdaqGS:IDCC) Go The Extra Mile?
Financial Newsweek - 7 hours ago
The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction.
InterDigital's (IDCC) CEO Bill Merritt on Q3 2017 Results - Earnings Call ...
Seeking Alpha - Oct 26, 2017
Consistent with last quarter's call, we will offer some highlights about the quarter and the company and then open the call up for questions.
InterDigital Announces Financial Results for Third Quarter 2017Year-over-year ... - Markets Insider
Interdigital Incorporated (NASDAQ:IDCC) Shorted Shares Increased 0.13% After ... - WeeklyHub
Analyst Stance On Two Stocks: Gastar Exploration Inc. (GST), InterDigital, Inc ...
Post Analyst - Nov 17, 2017
The recently concluded session had traders exchanging Gastar Exploration Inc. (NYSE:GST) low level. Roughly 0.38 million shares changed hands compared to the three-month volume average 1.13 million shares.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for IDCC to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate IDCC's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$74.15 Current Price

$97.49 Growth Price (DCF)

Undervalued by 31.48%


Growth Rate Assumed by Market: -8.11%


Future Free Cash Flow Growth Rate: 1.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$41.85 Stability Price (EPV)

Overvalued by 43.57%


Discount Rate: 15.0%

$6.72 NCA Price

Overvalued by 90.93%

$124.84 Book Price

Undervalued by 68.36%


Varying Cash Return on Invested Capital over the past 5 years

IDCC has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

IDCC has created $62.42 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 130.22M 154.51M 176.69M 61.03M 387.34M
divided by
Invested Capital 306.42M 288.29M 285.49M 140.80M 349.61M
Cash ROIC 42.50% 53.60% 61.89% 43.35% 110.79%

Varying Return on Equity over the past 5 years

IDCC has generated strong profits with money shareholders have invested. However, there is a substantial variation in their Return on Equity from year-to-year. This may reflect management's inability to generate consistent returns or may be caused by one-time events. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

IDCC has generated $28.98 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 271.80M 35.68M 101.42M 116.39M 305.48M
divided by
Stockholders' Equity 518.71M 528.65M 468.33M 510.52M 739.71M
Return on Equity 52.40% 6.75% 21.66% 22.80% 41.30%

Excellent Business Performance over the past 10 years

IDCC has been able to maintain profitability in good times and bad. This could mean IDCC has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

IDCC has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 90.61M 80.16M 316.67M 131.40M -65.35M 130.22M 154.51M 176.69M 61.03M 387.34M

Weak Balance Sheet

IDCC's financial position is not ideal. The key is to check whether IDCC is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 177.47M 141.66M 409.81M 541.67M 677.99M 577.28M 698.45M 703.93M 933.71M 952.76M
Current Assets 371.41M 241.02M 702.32M 619.56M 768.89M 814.35M 857.51M 843.18M 1.01B 1.22B
Total Assets 534.89M 405.77M 905.79M 874.64M 996.97M 1.06B 1.11B 1.19B 1.47B 1.73B
Current Liabilities 157.18M 126.54M 252.56M 178.56M 173.15M 172.91M 126.44M 205.17M 399.97M 425.48M
Total Liabilities 397.82M 318.11M 736.25M 521.53M 525.29M 537.90M 584.53M 726.26M 963.97M 988.14M
Stockholder' Equity 137.07M 87.66M 169.54M 353.12M 471.68M 518.71M 528.65M 468.33M 510.52M 739.71M
Current Ratio 2.36 1.90 2.78 3.47 4.44 4.71 6.78 4.11 2.53 2.87
TL-to-TA 0.74 0.78 0.81 0.60 0.53 0.51 0.53 0.61 0.65 0.57

Consistent Reinvestment of Profits over the past 10 years

IDCC has consistently retained profits. This may put IDCC in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, IDCC can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 133.31M 159.52M 246.77M 395.80M 466.73M 659.24M 680.72M 757.05M 847.03M 1.12B
Retained Earnings Growth - 19.66% 54.70% 60.39% 17.92% 41.25% 3.26% 11.21% 11.89% 32.32%

Varying Competitive Advantage over the past 10 years

IDCC likely has a competitive advantage which prevents other companies from entering or competing in their industry. However, there is a substantial variation in their Net Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$26.65 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 20.00M 26.21M 87.26M 153.62M 89.47M 271.80M 35.68M 101.42M 116.39M 305.48M
divided by
Revenue 234.23M 228.47M 297.40M 394.55M 301.74M 663.06M 325.36M 415.82M 441.44M 665.85M
Net Profit Margin 8.54% 11.47% 29.34% 38.93% 29.65% 40.99% 10.97% 24.39% 26.37% 45.88%

Strong Pricing Power over the past 10 years

IDCC has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$77.17 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 166.65M 169.58M 258.80M 394.55M 237.98M 536.78M 182.32M 282.01M 321.03M 552.31M
divided by
Revenue 234.23M 228.47M 297.40M 394.55M 301.74M 663.06M 325.36M 415.82M 441.44M 665.85M
Gross Margin 71.15% 74.23% 87.02% 100.00% 78.87% 80.95% 56.04% 67.82% 72.73% 82.95%

High Capital Intensity over the past 10 years

IDCC spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

69.34% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 62.12M 5.65M 4.02M 2.52M 31.01M 47.39M 63.66M 65.33M 53.47M 43.44M
divided by
Net Income 20.00M 26.21M 87.26M 153.62M 89.47M 271.80M 35.68M 101.42M 116.39M 305.48M
Capital Expenditure Ratio 310.53% 21.56% 4.61% 1.64% 34.66% 17.43% 178.41% 64.41% 45.94% 14.22%

Good Dividend History over the past 10 years

IDCC has distributed dividends for the past 6 years. Remember, the longer a company's dividend history, the more established the company might be and the more reliable the future of the dividend probably is.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - 18.15M 83.08M 12.35M 23.73M 28.94M 31.14M
divided by
Shares Outstanding 49.49M 45.96M 44.08M 44.82M 46.01M 43.40M 41.42M 39.88M 36.46M 35.19M
Dividend Paid Per Share - - - - 0.39 1.91 0.30 0.60 0.79 0.88
Price at Year End 23.05 26.79 26.86 41.63 43.57 39.89 29.81 53.71 50.39 91.35
Dividend Yield - - - - 0.91% 4.80% 1.00% 1.11% 1.57% 0.97%

Strong History of Stock Buybacks over the past 10 years

IDCC has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 49.49M 45.96M 44.08M 44.82M 46.01M 43.40M 41.42M 39.88M 36.46M 35.19M
Stock Bought Back - 7.67% 4.27% -1.66% -2.59% 6.03% 4.76% 3.87% 9.37% 3.62%
Share your thoughts about IDCC

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!