A Look at InterDigital’s (IDCC) Valuation Following Strong Q3 Results and Upbeat Outlook

InterDigital (IDCC) delivered third quarter results that grabbed investors’ attention, highlighted by strong year-over-year increases in sales and net income. The company also updated its earnings outlook, which signals ongoing financial strength.

See our latest analysis for InterDigital.

Backed by strong quarterly results, new patent agreements, and the acquisition of Deep Render to advance its AI video tech, InterDigital has caught investors’ eyes this year. While the share price dipped 8.7% in the last session, the momentum over the long term is hard to ignore, with an impressive 120.7% total shareholder return in the past 12 months and more than 680% over three years. These are clear signals of sustained growth and renewed confidence around its prospects.

If InterDigital’s surge has you curious about other tech leaders riding similar innovation waves, take your search further and discover See the full list for free.

But with shares up over 120 percent in the past year and new guidance pointing to more gains ahead, is InterDigital’s remarkable run a sign the stock is undervalued, or is the market already factoring in future growth?

Most Popular Narrative: 10% Overvalued

InterDigital’s fair value, as estimated by the most popular narrative, stands at $328.75 per share, which is below the latest closing price. This gap reflects how evolving growth assumptions and new licensing momentum are shaping expectations for where the stock should trade.

The recent 67% uplift in the Samsung license and an all-time high annualized recurring revenue, driven by multi-year agreements with major OEMs, have set highly optimistic expectations for continued outsized growth in future contract renewals. This may be inflating valuation multiples and overstating the sustainable revenue trajectory.

Read the complete narrative.

Want to see what’s fueling this premium valuation? There’s a formula behind these big price moves, and it revolves around extraordinary licensing wins and a leap in recurring revenue. Curious to uncover the future-focused numbers propelling this narrative? Discover the full methodology and boldest assumptions behind this valuation call. They may surprise even seasoned investors.

Result: Fair Value of $328.75 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, significant new licensing agreements and robust recurring revenue from industry leaders could challenge the prevailing view and support higher than expected long-term earnings.

Find out about the key risks to this InterDigital narrative.

Build Your Own InterDigital Narrative

If you want to dig deeper, you can analyze the data yourself and quickly build your own perspective from start to finish in just a few minutes. Why not Do it your way

A great starting point for your InterDigital research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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