InterDigital Inc Stock Upgraded (IDCC)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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 revenue growth, solid stock price performance, increase in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • IDCC's very impressive revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues leaped by 346.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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 754.1% when compared to the same quarter one year prior, rising from $9.24 million to $78.90 million.
  • 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 40.62% significantly outperformed against the industry.
  • INTERDIGITAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INTERDIGITAL INC reported lower earnings of $0.91 versus $6.40 in the prior year. This year, the market expects an improvement in earnings ($2.62 versus $0.91).

InterDigital, Inc. designs and develops technologies that enable and enhance wireless communications in the United States, Taiwan, Canada, Japan, Korea, Germany, Europe, China, and Asia. InterDigital has a market cap of $1.73 billion and is part of the technology sector and telecommunications industry. Shares are up 43.9% year to date as of the close of trading on Wednesday.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

5 Questions to Answer Before Investing in a Stock

5 Questions to Answer Before Investing in a Stock

Qualcomm's Giant Korean Antitrust Fine Is Another Good Argument for Buying NXP

Qualcomm's Giant Korean Antitrust Fine Is Another Good Argument for Buying NXP

How Apple and Nokia Could Both Score Victories in Their Battle Over Patents

How Apple and Nokia Could Both Score Victories in Their Battle Over Patents

Apple and Nokia Could Each Score Victories as Their Patent Battle Unfolds

Apple and Nokia Could Each Score Victories as Their Patent Battle Unfolds

InterDigital (IDCC) Marked As A Dead Cat Bounce Stock

InterDigital (IDCC) Marked As A Dead Cat Bounce Stock