Is INTERDIGITAL INC (NASDAQ:IDCC) a Minervini-style stock?

In this article we will dive into INTERDIGITAL INC (NASDAQ:IDCC) as a possible candidate for growth investing. Investors should always do their own research, but we noticed INTERDIGITAL INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

Minervini Trend Template Analysis.

IDCC checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Why IDCC may be interesting for high growth investors.

To evaluate a stock's growth potential, ChartMill utilizes a High Growth Momentum Rating (HGM) on a scale of 0 to 10. This assessment considers various growth and profitability aspects, like EPS and revenue growth, accelleration, surprises and revisions. IDCC has achieved a 7 out of 10:

Earnings Momentum

• IDCC has demonstrated consistent growth in its earnings per share (EPS) from one quarter to another (Q2Q), with a 190.0% increase. This indicates improving financial performance and the company's effective management of its operations.
• IDCC shows accelerating EPS growth: when comparing the current Q2Q growth of 190.0% to the previous quarter Q2Q growth of -33.72%, we see the growth rate improving.
• The 1-year EPS growth of IDCC (60.53%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• The EPS of IDCC has shown consistent growth over a 3-year period, indicating the company's ability to generate increasing earnings over time.
• IDCC has demonstrated strong q2q revenue growth of 140.0%, suggesting a favorable trend in the company's financials and indicating the potential for continued expansion.
• The sales growth of IDCC is accelerating: the current Q2Q growth of 140.0% is above the previous quarter Q2Q growth of -8.15%. Sales momentum and acceleration are key for high growth systems.
• With notable 1-year revenue growth of 58.02%, IDCC exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for future growth.
• Over the past 3 months, analysts have adjusted their EPS Estimate for IDCC with a 85.41% change. This highlights the evolving outlook on the company's EPS potential.
• IDCC has surpassed EPS estimates 3 times in the last 4 quarters, reflecting its strong financial performance and effective management. This trend suggests the company's ability to generate positive earnings surprises and drive shareholder value.

Profitability & Financial Strength

• IDCC has shown positive growth in its operating margin over the past year, indicating improved operational efficiency. This growth highlights the company's ability to effectively manage costs and maximize profitability.
• IDCC has experienced growth in its profit margin over the past year, reflecting improved operational performance.
• The free cash flow (FCF) of IDCC has seen steady growth over the past year, indicating enhanced cash flow generation and financial health. This trend underscores the company's effective capital management and its ability to generate sustainable cash flows.
• In terms of Return on Equity(ROE), IDCC is performing well, achieving a 41.83% ratio. This highlights the company's effective allocation of shareholder investments and signifies its commitment to maximizing returns.
• At a Debt/Equity ratio of 0.02, IDCC seems well-positioned to sustain growth while keeping debt in check.

Market Strength

• IDCC has maintained a healthy Relative Strength (RS) over the analyzed period, with a current 97.19 rating. This demonstrates the stock's ability to outperform its peers and indicates its competitive positioning.

Why is IDCC a setup?

ChartMill also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, IDCC exhibits a 5 setup rating, indicating its consolidation status in recent days and weeks.

IDCC has an excellent technical rating, but the quality of the setup is only medium at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Our latest full technical report of IDCC contains the most current technical analsysis.

Final Thoughts

Our High Growth Momentum + Trend Template screen will find you more ideas which meet the Minervini criteria.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.