InterDigital, Inc. (IDCC) stock analysis

P/E above its 5-year median

InterDigital's P/E of 33.1 is above its own 5-year median of 20.3.

P/E above the industry

InterDigital's P/E of 33.1 is above the Miscellaneous Investing median of 26.3.

EV/EBITDA above its 5-year median

InterDigital's EV/EBITDA of 15.5 is above its 5-year median of 9.3.

P/B above the industry

InterDigital's price-to-book of 6.20 is above the Miscellaneous Investing median of 1.20.

Trading above fair value

The share price of $300.72 is above our fair value estimate of $192.63.

Margin of safety under 20%

The price is 56.1% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 22.1% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 56.6% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -36.6% over the last twelve months, against a 5-year average of 55.4% a year.

Growing slower than the industry

Revenue grew -12.0% over the last twelve months; the Miscellaneous Investing median is 4.6%.

Guidance issued

The latest outlook (Full Year 2026 Revenue, Oct 29, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 26.8% over the last twelve months and averaged 28.8% over five years.

Return on capital over 10%

Return on invested capital was 83.8%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

InterDigital's return on equity of 26.8% is above the Miscellaneous Investing median of 3.1%.

Earnings grew over 5 years

Net income grew 55.4% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 38.5% over the last twelve months, against a 5-year average of 32.5%.

Net margin above the industry

InterDigital's net margin of 38.5% is above the Miscellaneous Investing median of 10.3%.

Low debt

Debt is 24.6% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 47.6% five years ago to 24.6%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 102% of total debt.

Interest well covered

Operating income covers interest expense 9.9 times.

Short-term assets cover short-term debts

Current assets are 1.90 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 7.91; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

InterDigital paid dividends worth 0.9% of the share price over the last twelve months.

Yield below Treasuries

The 0.9% 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; InterDigital yields 0.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 22.9% of net income.

Covered by free cash flow

Dividends take 23.4% of free cash flow.