InterDigital Inc Stock Upgraded (IDCC)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- InterDigital (Nasdaq: IDCC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:
  • IDCC's very impressive revenue growth greatly exceeded the industry average of 8.6%. Since the same quarter one year prior, revenues leaped by 467.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, INTERDIGITAL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 799.3% when compared to the same quarter one year prior, rising from $26.21 million to $235.67 million.
  • Net operating cash flow has significantly increased by 26328.08% to $341.75 million when compared to the same quarter last year. In addition, INTERDIGITAL INC has also vastly surpassed the industry average cash flow growth rate of -18.24%.
  • The gross profit margin for INTERDIGITAL INC is currently very high, coming in at 100.00%. IDCC has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, IDCC's net profit margin of 54.30% significantly outperformed against the industry.
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InterDigital, Inc. engages in the design and development of technologies that enable and enhance wireless communications. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. The company has a P/E ratio of 23, equal to the average telecommunications industry P/E ratio and above the S&P 500 P/E ratio of 17.7. InterDigital has a market cap of $1.49 billion and is part of the technology sector and telecommunications industry. Shares are down 19.9% year to date as of the close of trading on Thursday.

You can view the full InterDigital Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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