It has been about a month since the last earnings report for InterDigital (
IDCC Quick Quote IDCC - Free Report) . Shares have added about 0.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is InterDigital due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
InterDigital Q4 Earnings Beat on Top-Line Growth InterDigital reported healthy fourth-quarter 2022 results, with both the bottom line and top line beating the respective Zacks Consensus Estimate. The company expects this growth momentum to continue in the forthcoming quarters. Net Income
Net income in the December quarter was $32.4 million or $1.08 per share compared with $21.9 million or 70 cents per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of 16 cents.
In 2022, net income improved to $93.7 million or $3.07 per share from $55.3 million or $1.77 per share in 2021 on top-line expansion and lower operating expenses. Quarter Details
Total revenues in the quarter improved to $117.1 million from $111.8 million in the prior-year quarter, reflecting continuous licensing momentum. The top line beat the consensus estimate of $108 million. In 2022, total revenues aggregated $457.8 million compared with $425.4 million in 2021.
Recurring revenues in the fourth quarter were $103.6 million, up from $101.6 million a year ago. The year-over-year increase was primarily driven by new patent license agreements inked during the quarter. InterDigital exhibited continuing licensing momentum and strength in its recurring revenue base. Total operating expenses decreased to $78.5 million from $86.2 million in the prior-year quarter, resulting in an operating income of $38.6 million and $25.6 million, respectively. Cash Flow & Liquidity
In 2022, InterDigital generated $286 million of cash from operating activities compared with $130.4 million in 2021. As of Dec 31, 2022, the company had $693.5 million in cash and cash equivalents with $607.1 million of long-term debt compared with respective tallies of $706.3 million and $422.7 million in the prior-year period.
For the first quarter of 2023, InterDigital expects recurring revenues to be between $94 million and $98 million. Total operating expenses are expected to lie within $75-$79 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
Currently, InterDigital has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, InterDigital has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
InterDigital belongs to the Zacks Wireless Equipment industry. Another stock from the same industry, ViaSat (
VSAT Quick Quote VSAT - Free Report) , has gained 5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
ViaSat reported revenues of $651.44 million in the last reported quarter, representing a year-over-year change of -9.5%. EPS of -$0.61 for the same period compares with -$0.09 a year ago.
ViaSat is expected to post earnings of $9.44 per share for the current quarter, representing a year-over-year change of +2520.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +101.9%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for ViaSat. Also, the stock has a VGM Score of B.