A better buy-in window may exist right now for InterDigital Inc. (IDCC)

InterDigital Inc. (NASDAQ: IDCC) stock jumped 10.25% on Monday to $69.37 against a previous-day closing price of $62.92. With 0.91 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.25 million shares. During the session, the Telecom Services company that operates in wider Communication Services sector, reached to the highest price of $69.67 whereas the lowest price it dropped to was $66.75. The 52-week range on IDCC shows that it touched its highest point at $71.73 and its lowest point at $40.23 during that stretch. It currently has a 1-year price target of $83.50. With its current market cap of 2.03 billion, IDCC has annualized dividend of $1.40 while the current yield stands at 2.02%. Beta for the stock currently stands at 1.13.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of IDCC was up-trending over the past week, with a rise of 17.08%, but this was up by 44.67% over a month. Three-month performance surged to 46.60% while six-month performance rose 10.29%. The stock gained 0.61% in the past year, while it has gained 40.20% so far this year. A look at the trailing 12-month EPS for IDCC yields 2.71 with Next year EPS estimates of 2.72. For the next quarter, that number is 0.68. This implies an EPS growth rate of 22.70% for this year and 1.11% for next year. EPS is expected to grow by 20.25% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -27.40%.

Float and Shares Shorts:

At present, 29.66 million IDCC shares are outstanding with a float of 29.25 million shares on hand for trading. On Oct 13, 2022, short shares totaled 2.13 million, which was 7.19% higher than short shares on Sep 14, 2022. In addition to Mr. Lawrence Chen as the firm’s Pres, CEO & Director, Mr. Richard J. Brezski serves as its Exec. VP, CFO & Treasurer.

Institutional Ownership:

Through their ownership of 89.45% of IDCC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 7.47% of IDCC, in contrast to 50.26% held by mutual funds. Shares owned by individuals account for 35.96%. As the largest shareholder in IDCC with 15.12% of the stake, BlackRock Fund Advisors holds 4,485,331 shares worth 4,485,331. A second-largest stockholder of IDCC, The Vanguard Group, Inc., holds 3,353,002 shares, controlling over 11.30% of the firm’s shares. Fidelity Investments Canada ULC is the third largest shareholder in IDCC, holding 1,150,976 shares or 3.88% stake. With a 7.40% stake in IDCC, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 2,194,495 shares are owned by the mutual fund manager. The Fidelity Small Cap America Fund, which owns about 3.92% of IDCC stock, is the second-largest Mutual Fund holder. It holds 1,163,569 shares valued at 57.57 million. Vanguard Total Stock Market Index holds 3.02% of the stake in IDCC, owning 894,912 shares worth 44.28 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for IDCC since 4 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 0 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With IDCC analysts setting a high price target of $104.00 and a low target of $50.00, the average target price over the next 12 months is $83.50. Based on these targets, IDCC could surge 49.92% to reach the target high and fall by -27.92% to reach the target low. Reaching the average price target will result in a growth of 20.37% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. IDCC will report FY 2022 earnings on 02/15/2024. Analysts have provided yearly estimates in a range of $2.95 being high and $2.48 being low. For IDCC, this leads to a yearly average estimate of $2.65. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. InterDigital Inc. surprised analysts by $0.28 when it reported $0.74 EPS against a consensus estimate of $0.46. The surprise factor in the prior quarter was $0.12. Based on analyst estimates, the high estimate for the next quarter is $0.92 and the low estimate is $0.47. The average estimate for the next quarter is thus $0.64.

Dividends & Yield:

In terms of dividends, IDCC has a current ratio of $1.4, which is $1.4 over the trailing 12-months, while a dividend of $1.39 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and IDCC currently yields $2.02. In the past year, IDCC’s dividend yield has been $2.02, but when looking at the stock over the past five years, its yield has been $2.24. Accordingly, IDCC has a current buyback yield of $3.96. This was $3.96 for the TTM, and it was $4.44 for the past five years.

Summary of Insider Activity:

Insiders traded IDCC stock several times over the past three months with 13 Buys and 2 Sells. In these transactions, 1,788 shares were bought while 450 shares were sold. The number of buy transactions has increased to 62 while that of sell transactions has risen to 24 over the past year. The total number of shares bought during that period was 77,845 while 90,977 shares were sold.

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