InterDigital is a buy, this analyst says

Roth Capital Partners analyst Scott Searle says InterDigital’s (InterDigital Stock Quote, Chart, News, Analysts, Financials NASDAQ:IDCC) new patent licence agreement with Amazon is a major validation of the company’s streaming opportunity and intellectual property portfolio.

In a June 10 update, Searle maintained his “Buy” rating and $425.00 target on InterDigital.

InterDigital said it has entered into a patent licence agreement with Amazon covering devices and services, including Amazon Prime Video. The companies have also resolved all pending litigation, which began in August 2025, and will enter binding arbitration to determine final terms.

Searle said the deal is meaningful because it validates InterDigital’s compression-related IP with a major streaming customer and could set the stage for additional licensing agreements with other streaming providers.

“We believe this also provides a precursor to other licensing agreements with streaming providers,” Searle said.

The analyst said the agreement marks the first step in monetizing InterDigital’s $300-million-plus streaming market target by 2030, which supports his 2030 EPS target approaching $20.00.

“We conservatively believe that Amazon represents a $30M+ annual opportunity, but await further details from potential near-term revenue recognition and arbitration outcome,” Searle said.

Searle said Amazon is a complex opportunity because of its presence across both devices and services, its large global Prime base and uncertainty around how many Prime users actively use video services. He noted global Prime estimates of about 240 million subscribers and annual shipments of tens of millions of Alexa-enabled devices, though InterDigital’s monetization is more tied to video-centric consumer electronics.

Searle said legal costs should decline after reaching $19.4-million in the fourth quarter of 2025 and $17.5-million in the first quarter of 2026, nearly double the average of the previous four quarters.

Searle left his estimates unchanged, but said InterDigital continues to make progress on other legal fronts, including a preliminary injunction in Brazil and a fifth injunction against Disney in Germany.

Searle expects InterDigital to generate Adjusted EBITDA of $378.8-million on revenue of $678.4-million in fiscal 2026, improving to Adjusted EBITDA of $422.0-million on revenue of $685.5-million in fiscal 2027.

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