IDCC
InterDigital, Inc.
$260.45
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 50.3% below fair value
You pay
$260.45
Bear
$348.86
Fair
$524.44
Bull
$718.81
Bear
$348.86
+33.9%
9% stage 1 growth, 12% discount
Fair
$524.44
+101.4%
15% stage 1 growth, 12% discount
Bull
$718.81
+176.0%
19% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
38%
Implied Market Multiple
12.0x
Market is pricing in (growth)
3.7%
vs 15.0% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $450.00 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $524.44 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions