| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 60.20 | -84 |
| Graham Formula | 685.90 | 79 |
InterDigital, Inc. is a pioneering technology company specializing in wireless communications and video coding solutions. Headquartered in Wilmington, Delaware, the company designs and develops cutting-edge technologies that power digital cellular and wireless networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products. With a robust portfolio of approximately 27,500 patents and patent applications, InterDigital is a key player in enabling next-generation wireless innovations such as 5G NR, extended reality, and cellular IoT. The company's patented technologies are integral to a wide range of devices, including smartphones, tablets, IoT gadgets, and wireless infrastructure. Operating globally across the U.S., China, South Korea, Japan, Taiwan, and Europe, InterDigital continues to drive advancements in AI, video coding, and display technologies, positioning itself as a leader in the rapidly evolving tech landscape.
InterDigital presents an attractive investment opportunity due to its strong intellectual property portfolio and leadership in wireless communication technologies. The company's revenue of $868.5 million and net income of $358.6 million in the latest fiscal year reflect solid profitability, supported by a healthy operating cash flow of $271.5 million. With a market cap of $5.19 billion and a beta of 1.343, InterDigital offers growth potential but also carries moderate volatility risks. The company's focus on 5G and IoT technologies aligns with global trends, though competition in patent licensing and potential regulatory challenges in key markets like China could pose risks. The dividend yield of $1.9 per share adds to its appeal for income-focused investors.
InterDigital's competitive advantage lies in its extensive patent portfolio, which provides recurring licensing revenue and a strong moat in wireless communication technologies. The company's focus on R&D in 5G, IoT, and AI ensures it remains at the forefront of innovation. However, its reliance on licensing fees makes it vulnerable to legal disputes and shifts in patent enforcement policies. Competitors like Qualcomm and Nokia also dominate the wireless tech space with broader product offerings and deeper integration into hardware ecosystems. InterDigital's niche focus on IP licensing allows it to maintain high margins but limits diversification compared to vertically integrated rivals. Its global presence, particularly in Asia, provides growth opportunities but also exposes it to geopolitical risks. The company's ability to monetize its patents in emerging markets will be critical for sustained growth.