InterDigital (IDCC) Is Down 8.1% After Strong Earnings and Major Share Buyback Announcement – What's Changed

• InterDigital reported strong third quarter 2025 results, with US$164.68 million in sales and net income of US$67.5 million, while also issuing fourth quarter and full year earnings guidance projecting continued revenue and profitability growth.
• The company also announced it had completed a major share repurchase program, buying back more than half of its outstanding shares, a move that can affect shareholder value and earnings per share.
• We'll examine how InterDigital's robust earnings guidance and large-scale buyback update impact its investment narrative and growth assumptions.

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InterDigital Investment Narrative Recap

To invest in InterDigital, shareholders need confidence in the company’s ability to deliver consistent recurring revenue and margin expansion from its leadership in wireless licensing and global patent coverage, while effectively executing its move into adjacent markets. The latest strong earnings, reinforced by new guidance and a major buyback, bolster near-term momentum and earnings per share. However, these updates do not materially resolve the key risk that actual revenue from non-smartphone verticals may not match aggressive growth assumptions built into expectations.

Among recent announcements, InterDigital’s completion of its massive share repurchase program, buying back more than half its outstanding shares, stands out. This move amplifies near-term value for existing shareholders and further increases earnings per share, but it also places greater focus on the sustainability of cash flows from new license agreements, which remains a critical short-term catalyst for the stock.

Yet, in contrast to this apparent momentum, there is an important detail about the challenge of turning consumer electronics and IoT diversification into meaningful, recurring revenue that investors should be aware of...

Read the full narrative on InterDigital (it's free!)

InterDigital's outlook anticipates $633.9 million in revenue and $173.4 million in earnings by 2028. This reflects a 10.8% annual revenue decline and a $290.1 million decrease in earnings from the current $463.5 million.

Uncover how InterDigital's forecasts yield a $412.00 fair value, a 16% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members peg InterDigital’s fair value between US$71 and US$412 per share across four estimates. With high hopes for recurring revenue from new sectors, expectations for future performance can shift fast, see how other investors interpret the outlook for this evolving business.

Explore 4 other fair value estimates on InterDigital - why the stock might be worth less than half the current price!

Build Your Own InterDigital Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free InterDigital research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate InterDigital's overall financial health at a glance.

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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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