InterDigital Inc (IDCC)

[FISH21049]

InterDigital (IDCC) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Thu, September 28, 2023 at 4:45 PM CDT
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IDCC
+1.00%
In the latest trading session, InterDigital (IDCC) closed at $80.77, marking a +1% move from the previous day. This change outpaced the S&P 500's 0.59% gain on the day. Meanwhile, the Dow gained 0.35%, and the Nasdaq, a tech-heavy index, added 0.83%.

Prior to today's trading, shares of the wireless research and development company had lost 7.24% over the past month. This has lagged the Computer and Technology sector's loss of 2.71% and the S&P 500's loss of 2.84% in that time.

Investors will be hoping for strength from InterDigital as it approaches its next earnings release. The company is expected to report EPS of $1.19, up 60.81% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $98.94 million, down 13.79% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.91 per share and revenue of $503.81 million, which would represent changes of +157.65% and +10.05%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for InterDigital. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.15% lower within the past month. InterDigital is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, InterDigital currently has a Forward P/E ratio of 10.11. This represents a discount compared to its industry's average Forward P/E of 12.63.

Also, we should mention that IDCC has a PEG ratio of 0.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. IDCC's industry had an average PEG ratio of 1.34 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 30% of all 250+ industries.