InterDigital Inc. Common Stock (IDCC)

FairStock Score: 48/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for durable advantages, high returns on capital, and a price that leaves room for error. InterDigital is a patent-licensing operation: it spends on wireless, visual, and AI research and licenses the resulting technology to device makers. That model can be wonderful because incremental licenses carry high margins. In the fiscal Q2 2026 quarter ended 2026-06-30, revenue was $260.2M and net income was $116.4M, a 44.73% net margin. FairStock's calculations show ROE of 26.40%, ROCE of 10.35%, debt-to-equity of 0.33, a Piotroski F-Score of 7/9, and an Altman Z-Score of 7.31. Trailing free cash flow was $496.6M, a 5.8% FCF yield on the $8.6B market cap. Those are signs of a royalty stream with real economics. But the latest comparison is not smooth: in fiscal Q2 2025, the quarter ended 2025-06-30, revenue was $300.6M and net income was $180.6M. So fiscal Q2 2026 revenue fell 13.45% and net income fell 35.55% year over year, while diluted EPS was $3.40 versus $5.35. Full-year FY2025, the year ended 2025-12-31, revenue was $834.0M versus $868.5M in FY2024, the year ended 2024-12-31, while net income rose to $406.6M from $358.6M. Licensing is lumpy and renewal-dependent. At the close on 2026-10-13, the price was $332.88. FairStock's P/E is 39.16, P/B is 7.14, EV/EBITDA is 17.97, and Graham Number is $94.38 - a margin of safety of -252.70%. The quality is evident, but the price already assumes a lot. I would want a wider discount before calling it a Graham-style bargain.

In plain English: InterDigital makes money by licensing wireless and video technology patents to device makers, using only 460 employees. The business looks financially strong - high profit margins, strong cash flow, and low debt - but sales and profit dropped in the latest quarter compared with a year earlier. The stock price looks expensive compared with the company's accounting value and long-term earnings, so it is not a bargain by traditional value measures.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer