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InterDigital, Inc. (IDCC) Hits Fresh High: Is There Still Room to Run?
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Shares of InterDigital (IDCC - Free Report) have been strong performers lately, with the stock up 10.1% over the past month. The stock hit a new 52-week high of $119.86 in the previous session. InterDigital has gained 8% since the start of the year compared to the 7.7% move for the Zacks Computer and Technology sector and the 2.9% return for the Zacks Wireless Equipment industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 15, 2024, InterDigital reported EPS of $1.41 versus consensus estimate of $1.21 while it beat the consensus revenue estimate by 1.16%.
Valuation Metrics
InterDigital may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
InterDigital has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 14.3X. On a trailing cash flow basis, the stock currently trades at 9.8X versus its peer group's average of 13.2X. Additionally, the stock has a PEG ratio of 1.05. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, InterDigital currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if InterDigital meets the list of requirements. Thus, it seems as though InterDigital shares could have potential in the weeks and months to come.
How Does IDCC Stack Up to the Competition?
Shares of IDCC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is QUALCOMM Incorporated (QCOM - Free Report) . QCOM has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. QUALCOMM Incorporated beat our consensus estimate by 15.55%, and for the current fiscal year, QCOM is expected to post earnings of $9.57 per share on revenue of $37.51 billion.
Shares of QUALCOMM Incorporated have gained 0.5% over the past month, and currently trade at a forward P/E of 15.95X and a P/CF of 17.77X.
The Wireless Equipment industry may rank in the bottom 76% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for IDCC and QCOM, even beyond their own solid fundamental situation.
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InterDigital, Inc. (IDCC) Hits Fresh High: Is There Still Room to Run?
Shares of InterDigital (IDCC - Free Report) have been strong performers lately, with the stock up 10.1% over the past month. The stock hit a new 52-week high of $119.86 in the previous session. InterDigital has gained 8% since the start of the year compared to the 7.7% move for the Zacks Computer and Technology sector and the 2.9% return for the Zacks Wireless Equipment industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 15, 2024, InterDigital reported EPS of $1.41 versus consensus estimate of $1.21 while it beat the consensus revenue estimate by 1.16%.
Valuation Metrics
InterDigital may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
InterDigital has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 14.3X. On a trailing cash flow basis, the stock currently trades at 9.8X versus its peer group's average of 13.2X. Additionally, the stock has a PEG ratio of 1.05. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, InterDigital currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if InterDigital meets the list of requirements. Thus, it seems as though InterDigital shares could have potential in the weeks and months to come.
How Does IDCC Stack Up to the Competition?
Shares of IDCC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is QUALCOMM Incorporated (QCOM - Free Report) . QCOM has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. QUALCOMM Incorporated beat our consensus estimate by 15.55%, and for the current fiscal year, QCOM is expected to post earnings of $9.57 per share on revenue of $37.51 billion.
Shares of QUALCOMM Incorporated have gained 0.5% over the past month, and currently trade at a forward P/E of 15.95X and a P/CF of 17.77X.
The Wireless Equipment industry may rank in the bottom 76% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for IDCC and QCOM, even beyond their own solid fundamental situation.