InterDigital (NASDAQ:IDCC) Shares Gap Up on Better-Than-Expected Earnings

Key Points

• InterDigital reported a significant earnings beat: quarterly EPS was $3.11 versus the $1.34 analyst consensus, while revenue rose 17.4% year over year to $193.43 million, above estimates of $152.97 million. Shares opened at $339.41 after previously closing at $320.56.
• The company increased its quarterly dividend from $0.70 to $0.75 per share, equating to a $3.00 annualized payout and a 0.9% yield.
• Analysts maintain a “Moderate Buy” consensus with a $450 price target, although ratings were mixed. Institutional investors own 99.83% of the stock, while insiders sold 4,800 shares worth approximately $1.6 million during the last quarter.

InterDigital, Inc. (NASDAQ:IDCC - Get Free Report)'s share price gapped up before the market opened on Thursday following a better than expected earnings announcement. The stock had previously closed at $320.56, but opened at $339.41. InterDigital shares last traded at $345.4250, with a volume of 26,275 shares changing hands.

The Wireless communications provider reported $3.11 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.34 by $1.77. InterDigital had a return on equity of 28.17% and a net margin of 38.32%. The firm had revenue of $193.43 million for the quarter, compared to analyst estimates of $152.97 million. During the same quarter last year, the company posted $1.93 earnings per share. The business's revenue was up 17.4% on a year-over-year basis.

InterDigital Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Wednesday, October 28th. Shareholders of record on Wednesday, October 14th were paid a $0.75 dividend. This represents a $3.00 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend was Wednesday, October 14th. This is an increase from InterDigital's previous quarterly dividend of $0.70. InterDigital's dividend payout ratio is presently 34.60%.

Analysts Set New Price Targets

A number of analysts recently weighed in on the stock. Weiss Ratings raised shares of InterDigital from a "buy (b-)" rating to a "buy (b)" rating in a research report on Thursday, October 8th. Zacks Research lowered shares of InterDigital from a "strong-buy" rating to a "hold" rating in a report on Monday, October 19th. Three investment analysts have rated the stock with a Buy rating and one has given a Hold rating to the company. According to MarketBeat, InterDigital currently has a consensus rating of "Moderate Buy" and a consensus target price of $450.00.

Insider Buying and Selling

In other news, Director Joan H. Gillman sold 300 shares of the company's stock in a transaction on Friday, August 7th. The stock was sold at an average price of $331.06, for a total transaction of $99,318.00. Following the completion of the sale, the director directly owned 22,736 shares of the company's stock, valued at $7,526,980.16. This represents a 1.30% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Rajesh Pankaj sold 1,500 shares of the firm's stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $324.88, for a total transaction of $487,320.00. Following the completion of the transaction, the chief technology officer directly owned 66,516 shares of the company's stock, valued at $21,609,718.08. This represents a 2.21% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 4,800 shares of company stock worth $1,595,118 in the last quarter. Company insiders own 3.50% of the company's stock.

Institutional Trading of InterDigital

Institutional investors have recently made changes to their positions in the stock. Reinhart Partners LLC. lifted its stake in shares of InterDigital by 9.0% in the 2nd quarter. Reinhart Partners LLC. now owns 460,404 shares of the Wireless communications provider's stock valued at $130,359,000 after purchasing an additional 38,115 shares during the last quarter. Congress Asset Management Co. grew its holdings in InterDigital by 8.7% during the third quarter. Congress Asset Management Co. now owns 458,053 shares of the Wireless communications provider's stock valued at $149,357,000 after purchasing an additional 36,620 shares during the last quarter. Bank of America Corp DE lifted its stake in shares of InterDigital by 31.3% in the first quarter. Bank of America Corp DE now owns 266,724 shares of the Wireless communications provider's stock worth $80,551,000 after buying an additional 63,524 shares during the last quarter. Arrowstreet Capital Limited Partnership grew its stake in InterDigital by 135.7% in the 1st quarter. Arrowstreet Capital Limited Partnership now owns 219,388 shares of the Wireless communications provider's stock valued at $66,255,000 after buying an additional 126,328 shares during the last quarter. Finally, Royal Bank of Canada grew its stake in InterDigital by 375.7% in the 1st quarter. Royal Bank of Canada now owns 199,655 shares of the Wireless communications provider's stock valued at $60,297,000 after buying an additional 157,687 shares during the last quarter. 99.83% of the stock is currently owned by institutional investors and hedge funds.

InterDigital Stock Up 7.7%

The stock has a market cap of $8.91 billion, a P/E ratio of 39.83 and a beta of 1.43. The company has a current ratio of 1.74, a quick ratio of 1.74 and a debt-to-equity ratio of 0.01. The firm's fifty day moving average is $332.53 and its 200 day moving average is $318.09.

InterDigital Company Profile

InterDigital, Inc is a technology research and development company that creates advanced wireless, video and related connectivity technologies. Its work supports communications across cellular networks, including 4G and 5G, as well as Wi-Fi, the Internet of Things and other connected devices.

The company's primary business is developing intellectual property and licensing its patented technologies to manufacturers and other industry participants. Its portfolio includes innovations related to wireless communications, radio access networks, signal processing, video compression and delivery, and connected-device functionality.

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