InterDigital: $1 Billion Revenue Target Is Achievable
We rate InterDigital (IDCC) as a "Buy" and recommend investors consider adding it to their portfolios as the company is well-positioned to achieve its $1 billion revenue target.
Latest Developments:
InterDigital (IDCC) reported $128.68 million in 3Q24 revenues, exceeding estimates by $32.73 million. While year-on-year growth declined, the company raised its FY2024 revenue guidance to $860 million, driven by new agreements with OPPO and Lenovo. Despite challenges like Huawei's license expiration and declining catch-up revenues, IDCC is positioned for growth, particularly with OPPO's partnership. OPPO, a significant global smartphone player, will boost recurring revenue, supporting the company's $1 billion target by 2030.
Investment Case:
IDCC has a strong track record of generating sustainable cash flows and returning value to shareholders. The company is strategically expanding its licensing portfolio, with its technologies powering 70% of the world's smartphones. The $1 billion revenue target by 2030 is achievable, with at least 50% of that expected from the smartphone segment. IDCC’s consistent cash flow and high ROI metrics further support its potential for growth. Despite a 55.94% YTD surge, the company still has upside potential, with a valuation model suggesting a 47% upside.
Company's Valuation:
Based on IDCC’s trajectory and strategic partnerships, the DCF valuation suggests an implied share price of $243.50, representing a 47% upside. Should IDCC continue its strong performance, the share price could reach $348.10, offering even greater returns.
Disclaimer: The above is an excerpt on a report written by our close associate, Selendis Research. Interested parties may check out the full report here on Seeking Alpha. All information provided is intended solely for general informational purposes. Seven Insights does not take into account individual financial goals or situations and does not provide personalized investment advice. Seven Insights is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank.