InterDigital: Strong Business, Not A Big Enough Discount Yet (NASDAQ:IDCC) | Seeking Alpha
HomeTechSummaryInterDigital, Inc. is rated Hold, as the recent sell-off reflects fair value tension between strong fundamentals and an expensive entry point. Q1 results showed solid ARR growth and favorable. . .
HomeTechSummaryInterDigital, Inc. is rated Hold, as the recent sell-off reflects fair value tension between strong fundamentals and an expensive entry point. Q1 results showed solid ARR growth and favorable licensing wins, but 31% of revenue was one-time catch-up, raising sustainability concerns. My DCF base case values IDCC at $249/share with 8. 4% WACC and 3% terminal growth, implying 7% downside from current levels. Upside depends on CE/IoT/Auto momentum and converting video-services litigation into recurring revenue; the current price already discounts optimistic growth. J Studios/DigitalVision via Getty ImagesI'm rating InterDigital, Inc. (IDCC) a Hold. The short answer: The April 30 sell-off proved it is indeed a strong business, but not a big enough gap to warrant a purchase for me. For myself, there's some downside4 FollowersAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure:Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.