Adeia Inc. (ADEA) stock analysis

P/E below its 5-year median

Adeia's P/E of 16.8 is below its own 5-year median of 23.0.

P/E above the industry

Adeia's P/E of 16.8 is above the Communications median of 14.4.

EV/EBITDA below its 5-year median

Adeia's EV/EBITDA of 12.0 is below its 5-year median of 13.7.

P/B above the industry

Adeia's price-to-book of 3.91 is above the Communications median of 1.60.

Trading below fair value

The share price of $17.13 is below our fair value estimate of $17.69.

Margin of safety under 20%

The price is 3.2% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 0.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth accelerating

Net income grew 58.2% over the last twelve months, against a 5-year average of -5.4% a year.

Growing faster than the industry

Revenue grew 22.1% over the last twelve months; the Communications median is -0.2%.

Guidance raised

Adeia raised its full year 2026 Net income outlook on Nov 2, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 25.9% over the last twelve months and averaged 4.6% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 18.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Adeia's return on equity of 25.9% is above the Communications median of 1.1%.

Earnings shrank over 5 years

Net income shrank 5.4% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 25.0% over the last twelve months, against a 5-year average of -4.4%.

Net margin above the industry

Adeia's net margin of 25.0% is above the Communications median of -2.6%.

High debt

Debt is 78.9% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 57.6% five years ago to 78.9%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 46.8% of total debt.

Interest well covered

Operating income covers interest expense 5.2 times.

Short-term assets cover short-term debts

Current assets are 3.64 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.63; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Adeia paid dividends worth 1.2% of the share price over the last twelve months.

Yield below Treasuries

The 1.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Adeia yields 1.2%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 8 fiscal years.

Covered by earnings

Dividends take 18.9% of net income.

Covered by free cash flow

Dividends take 12.5% of free cash flow.