IDCC  Interdigital Inc.

Exchange

NASDAQ

Sector

Miscellaneous

Industry

Multi-Sector Companies

Market Cap.

2.86B

Vuru Grade

77.51/100

Current Price

$82.60
-0.20 (-0.24%)

Growth Price

$97.59
Undervalued by 18.15%

Stability Price

$41.89
Overvalued by 49.29%

Company Metrics

  • P/E 9.29
  • P/S 4.40
  • P/B 3.85
  • EPS 8.89
  • Cash ROIC 62.42%
  • Cash Ratio 2.24
  • Dividend 1.20 / 1.45 %
  • Avg. Vol. 346,870.00
  • Shares 34.62M
  • Market Cap. 2.86B

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

Is InterDigital Inc a Buy?
Motley Fool - Sep 28, 2016
InterDigital (NASDAQ:IDCC) recently showed up on my radar for companies to watch. In the two months since the last quarterly report, the company has continued its relentless rise and is up about 60% year to date. The company operates in the burgeoning ...
Why InterDigital, Inc. Stock Plunged Today
Motley Fool - Feb 24, 2017
What happened. Shares of InterDigital Inc. (NASDAQ:IDCC) fell 13.2% on Thursday after the wireless technology company announced solid fourth-quarter 2016 results, but followed with disappointing guidance.
InterDigital Reports Fourth Quarter and Full Year 2016 Financial Results - GlobeNewswire (press release)
InterDigital Inc. (IDCC) Plunges 13.16% on February 23 - Equities.com
Why InterDigital, Inc. Fell 10% in February
Motley Fool - Mar 9, 2017
InterDigital is making most of its sales and profits from aging 3G and 4G technologies. That's good enough for now, but investors will need the company to stake a serious claim in the upcoming 5G market-share grab. From that perspective, I find it ...
Undervalued InterDigital Inc, Well Positioned For Growth In 5G And The IoT
ValueWalk - Mar 21, 2017
One of the cheapest stocks in our All Investable - Stock Screener is InterDigital, Inc. (NASDAQ:IDCC). InterDigital Inc (InterDigital) designs and develops advanced technologies that enable and enhance wireless communications and capabilities. Since ...
InterDigital Issues Revenue Guidance for Second Quarter 2017
GlobeNewswire (press release) - May 11, 2017
WILMINGTON, Del., May 11, 2017 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile technology research and development company, today announced that it expects its total second quarter 2017 revenue to be between $130 million and ...
Dougherty & Co Analysts Reduce Earnings Estimates for InterDigital, Inc. (IDCC) - The Cerbat Gem
InterDigital, Inc. (NASDAQ:IDCC) Files An 8-K Other Events - Market Exclusive
InterDigital to Present at 18th Annual B. Riley & Co. Institutional Investor ...
GlobeNewswire (press release) - May 17, 2017
WILMINGTON, Del., May 17, 2017 (GLOBE NEWSWIRE) -- InterDigital, Inc. (NASDAQ:IDCC), a mobile technology research and development company, today announced that the company will be presenting at the 18th Annual B. Riley & Co.
Algert Global LLC Takes Position in InterDigital, Inc. (IDCC) - The Cerbat Gem
InterDigital Inc. (IDCC) Moves Higher on Volume Spike for May 18 - Equities.com
Algert Global LLC Buys Shares of 10372 InterDigital, Inc. (IDCC)
The Cerbat Gem - May 28, 2017
InterDigital logo Algert Global LLC bought a new position in shares of InterDigital, Inc. (NASDAQ:IDCC) during the first quarter, according to its most recent filing with the Securities and Exchange Commission (SEC).
ValuEngine Upgrades InterDigital, Inc. (IDCC) to "Strong-Buy" - Chaffey Breeze
InterDigital, Inc. (IDCC) Stake Raised by Stifel Financial Corp - Markets Daily
Risk Malaise Alert in Option Market: InterDigital Inc Implied Price Swing Hits ...
CML News - May 26, 2017
Before we dive into any analysis we simply note that InterDigital Inc (NASDAQ:IDCC) risk is actually priced pretty low by the option market as of right now.
Stock Corner: Tracking Metrics for InterDigital, Inc. (NASDAQ:IDCC)
Searcy News - 16 hours ago
The 12 month stock volatility for InterDigital, Inc. (NASDAQ:IDCC) is currently 32.294200. The 6 month volatility is 33.056900, and the 3 month is seen at 27.137100.
Nokia, InterDigital End IP Row As Microsoft Drops FRAND Suit
Law360 (subscription) - May 16, 2017
Law360, Los Angeles (May 15, 2017, 9:26 PM EDT) -- InterDigital Communications Inc. agreed to drop infringement claims over a wireless technology patent against Nokia Inc. in Delaware federal court Monday after the patent was found invalid, while Nokia ...
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.

$82.60 Current Price

$97.59 Growth Price (DCF)

Undervalued by 18.15%


Growth Rate Assumed by Market: -4.20%


Future Free Cash Flow Growth Rate: 1.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$41.89 Stability Price (EPV)

Overvalued by 49.29%


Discount Rate: 15.0%

$6.73 NCA Price

Overvalued by 91.85%

$124.84 Book Price

Undervalued by 51.14%


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%
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