Analysts Just Made A Notable Upgrade To Their InterDigital, Inc. (NASDAQ:IDCC) Forecasts

InterDigital, Inc. (NASDAQ:IDCC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investors have been pretty optimistic on InterDigital too, with the stock up 12% to US$116 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After this upgrade, InterDigital's five analysts are now forecasting revenues of US$581m in 2024. This would be a satisfactory 3.6% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to dive 35% to US$5.22 in the same period. Prior to this update, the analysts had been forecasting revenues of US$506m and earnings per share (EPS) of US$4.03 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for InterDigital

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.0% to US$124 per share.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that InterDigital's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.6% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than InterDigital.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at InterDigital.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple InterDigital analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.