Analyst Coverage of InterDigital

Updated: March 5, 2007       

Dates of relatively recent reports are in red below

First Albany: Santosh Rao  (March 1, 2007)   More First Albany/Santosh Rao info below

Santash Rao (replacing Frank Marsala - now with Gartner - as primary analyst) retains $40 12 month target but adjusts rating from strong buy to buy because of IDCC's relatively higher share. "We continue to believe the company remains well positioned to add new 3G licensees in 2007, and will be successful in its proceedings with Samsung, either of which should move the share price higher."

Nollenberger: Casey Ryan.   (March 1, 2007)    More Nollenberger/Casey Ryan info below

Reiterates Buy. Reiterates target of $40  Casey Ryan, Nollenberger, reiterates "Buy" recommendation and reiterates share price target of $40.  "We believe the new 3G deals are the most important near-term catalysts for the company's shares beyond the Samsung resolution."

Hilliard Lyons: Tom Carpenter   (March 1, 2007)   More Hilliard/Carpenter info below

Tom Carpenter reiterates his rating to Long-term buy and reiterates his share price target of $40,  CEO Bill Merritt is on record that InterDigital will sign a 3G license with at least one major handset manufacturer in 2007. We believe IDCC can parlay its $175 million to $200 million 2G arbitrtion award with Samsung into a combined 2G and 3G license. In addition, Sony Ericsson and IDCC have a good working relationship, which could result is a 3G license in 2007.

Boenning & Scattergood: Michael Ciarmoli and Bradley Mook   (February 28, 2007)   More info on Boenning & Scattergood below

Reiterating our Market Outperform rating and raising our price target to $43 (from $39) on shares of IDCC. Although the quarterly results may have been fairly muted we believe IDCC is making great strides towards capturing royalties from the budding 3G marketplace. Furthermore, we believe the company's product development business will eventually be a solid compliment to its licensing business, allowing for an additional method of capturing revenue from the sizable wireless market.  In January we named InterDigital one of our Top Picks for 2007 and we remain confident in that selection.

Zacks Equity Research: David Weissman    (November 3, 2006)   More information on David Weissman and Zacks Equity Research below

Founded in 1978, this firm uses quanitative analysis related to earnings estimates revisions, complemented with qualitative analysis by investment professional like David Weissman. On November 3, 2006, InterDigital is reiterated as a buy and the six month share price target is raised to $42 from $39.

Standard and Poors Quantitative Stock Report  September 23,2006

Sabrient Systems / BNY Jaywalk Consensus  (September 6, 2006)             September 25, 2006   1 page BNY Jaywalk Update

Initiates with a BUY rating. No price target provided.  Sabrient Systems is an independent research firm providing statistical analysis of a company's fundamental data to investment professionals. Sabrient uses computer-driven quanitative methodology to identify stocks that appear poised to outperform or underperform the market. (This computer-driven quantitative approach is different from the "hands on" personal analysis of "retail" analysis by firms above like First Albany (Frank Marsala), Nollenberger (Casey Ryan) and others. Excellent graphics throughout the report make this an easy one to understand. Sept. 18, 2006 1 page BNY Jaywalk update

Ford Equity Research / BIR   (Best Independent Research group of five analyst firms)     September 15, 2006

Reiterates BUY  Raises recommendation from "Favorable" to "Most Favorable"  The Ford research team projects that IDCC will strongly outperform the market over the next 6 to 12 months. Our decision is based on systematic analysis, which balances IDCC's quality and trend of its earnings growth, relative fundamental valuation and its timeliness. BIR is a group of five analyst firms (including Ford) who share their expertise and research with each other under the umbrella of "Best Investment Research, LLP"

Reuters Company Research Report    (August 15, 2006)    No analyst cited as author of report   A quantitative report based on wide variety of Company and industry financial information. with excellent graphics and tools for deciding whether this is a good investment for the investor reading the report.    

Link here to:

First Albany: Santosh Rao March 1, 2007 Update Report

Santash Rao (replacing Frank Marsala - now with Gartner - as primary analyst) retains $40 12 month target, but adjusts rating from strong buy to buy because of IDCC's relatively higher share price. "We continue to believe the company remains well positioned to add new 3G licensees in 2007, and will be successful in its proceedings with Samsung, either of which should move the share price higher."

Also available:

Archived previous UPDATES for First Albany: Frank Marsala:

December 6, 2006 Update

Frank Marsala, First Albany Capital, reiterates "strong buy" and reiterates target of $40   We adjusted our model to reflect the company's guidance.... IDCC shares sold off more than we would have thought on the guidance, in part because of the consensus estimate being skewed by one estimate that includes the revenues. from the settlement of the company's litigation with Samsung.

.   December 6, 2006

November 2, 2006 Update   (Reiterates) Strong Buy and  reiterates target share price of $40  Sell-Off Overdone; Reiterate Strong Buy
* InterDigital reported its 3Q:06 results yesterday morning and held a conference call discussing these results later in the day. Results for the quarter were essentially in line with expectations, with revenues slightly lower than the consensus and EPS meeting the consensus estimate.
* InterDigital shares experienced a significant sell off yesterday, which we believe reflected a few items. First, the company guided
for sequentially higher operating expenses for 4Q:06. Second, we believe investors came away from the call believing that the
environment for patent licensing is becoming more difficult. Third, we believe investors may have been expecting a new 3G
patent license in 2006. Fourth, we believe investors may have noted the quarter's slightly lower recurring revenue, and we
believe there is some sensitivity to the level of recurring revenues in upcoming quarters.
* We reiterate our Strong Buy rating, as we do not believe the revenue and EPS changes we made to our model are significant and
they do not justify yesterday's 16% sell off. The key perhaps, is that we continue to believe the company remains well positioned
to add new 3G licensees in 2007 and we continue to believe IDCC will be successful in its proceedings with Samsung, either of which should move the share price higher.

October 4, 2006 Update  (Reiterates) Strong Buy and  reiterates target share price of $43.   InterDigital announced today that it has extended its licensing arrangement with Infineon (IFX).... allows InterDigital to integrate its own 3G baseband design (WCDMA, HSDPA and HSUPA) with Infineon's 2G suite to offer a complete dual-mode 2G/3G wireless modem platform suite, including the 3G protocol stack.... This extended licensing agreement is positive for InterDigital, as it will enable the company to offer a more complete product, and will improve its chances to add new licensees for its technology solutions suite.

September 7, 2006  Update  (Reiterates) Strong Buy and  Raises Target share price from $40 to $43 (September 7, 2006)     Cites very favorable 2G Samsung arbitration ruling of Sept. 6. Total amount to be paid InterDigital comes to roughly $180 million, which is significantly higher that his previously estimated range of $60-$115 million. He believes new arb ruling may open door for discussions on a 3G deal. Marsala believes there remains a number of positive catalysts for this stock, altho timing is difficult to forecast. "Nonethless, we believe we can continue to get very good visibiliy on the company's quarterly top and bottom line numbers, which is more than we can say for most of the companies in our universe."

September 5, 2006 Update        (Reiterates) Strong Buy   (Reiterates) Target of $40   In this report, Frank Marsala provides a fascinating estimate of potential 3G royalties from Samsung based on this year's LG royalty deal. Further he notes possible new strategy in US for collecting royalties based on Smoot-Hawley in which the ITC may rule to bar imports into the US of patent infringing products. Well worth reading

August 17, 2006 Updated Report

August 3, 2006 Updated Report 

July 11, 2006 Updated Report  

June 19, 2006 Updated Report

May 24, 2006 Updated Report

Brief updates on four companies, including InterDigital May 24,2006

April 28, 2006 Updated Report

March 31, 2006:  

September 26, 2005

January 18, 2005   

Nollenberger Capital Partners: Casey Ryan

Nollenberger describes itself as imparting a client-centric, research-driven philosophy. "We are proficient at providing thoughtful, investigative research expected from the asset management firms and sophisticated investors (who) have entrusted us with their capital. Our research objective is singularly focused on identifying solid businesses where the equity in these companies has the strong potential to appreciate on an absiolute basis."

San Francisco-based Nolenberg Capital Partners hired five to its equity capital markets and equity research group.; four came from Wells Fargo Securities. The Wells Fargo hires included Casey Ryan as a senior research analyst covering wireless communications. In his career as an analyst, Casey Ryan has covered InterDigital, Motorola, Qualcomm, Powerwave Technologies, Omnivision Technologies, Webex Communications and other communications tech firms.

Link here to:

December 6, 2006 Nolenberg: Casey Ryan Update Report

Casey Ryan, Nollenberger, reiterates "Buy" recommendation and reiterates share price target of $40.  We are lowering our 4Q revenue and EPS estimtes for InterDigital to $62 million and $0.32.... Product revenue opportunity may get boost from 3G launch in China.... We view Chinese 3G and TD-SCDMA development as a strong positive for InterDigital

November 2, 2006 Update 

Reiterates Buy. Reiterates target of $40  Reports In-Line 3Q; No Samsung Resolution; Valuation Compelling Again
InterDigital Communications reported 3Q results of $67.2 million and $0.40, in line with Street consensus and our estimates. InterDigital reported $53.5 million of recurring revenue in 3Q, down slightly from 2Q levels. A large share buyback, which reduced shares by close to 3 million in 3Q, helped InterDigital to achieve the Street consensus EPS of $0.40 in 3Q. InterDigital also spoke in more detail about plans to pursue ASIC business in the embedded and PC wireless card business.
• The top customers for InterDigital during 3Q were LG at 27%, NEC at 17%, and Sharp at 17%. We are surprised that Sony-Ericsson did not appear as a 10% customer during the quarter although we note that revenues reflect recognized 2Q shipments.
• Why the massive sell-off? We believe that investors have overreacted to several issues discussed in the company's earnings release. First, recurring revenues did not increase as expected in 3Q, which we believe has raised concerns over aggregate handset prices and the impact to royalties for InterDigital. Second, we believe that the lack of resolution with Samsung and the guidance for somewhat higher legal expenses increased concerns over significant drops in net income in coming quarters. We see this event as unlikely.
• We are adjusting our model to reflect the clear change in timing of revenues from the Samsung settlement and have incorporated some elements of the company's guidance on expenses into our model as well. The most significant change is the shift of $165 million in revenue related to Samsung from 4Q06 to 1Q07. Our new 4Q06 estimates are now $71 million and $0.42, down from $237 million and $2.28. We are raising our FY07 estimates to $418 million and $3.58 from $253 million and $1.60 previously.
• Valuation is now compelling again. Yesterday's sharp sell-off creates an excellent opportunity for investors, in our view. While 3Q was not outstanding, it was not as disappointing as the share price decline would make it appear. Shares now trade at below 10x our new FY07 EPS estimate of $3.58.
• We are reiterating our Buy rating and price target of $40. Our FY07 EPS estimate includes a large one-time payment so we build our price target off our estimate for recurring EPS of $1.60 in FY07, which implies a valuation of 25x, roughly in line with the broader peer group.

October 30, 2006 update prior to 3Q company report

October 5, 2006 Updated Report

Reiterates Buy. Reiterates target of $40 based on FY07 EPS estimate  of $1.60

Yesterday, InterDigital announced that it has expanded its licensing relationship with Infineon, ... enabling InterDigital to provide a complete 2G wireless baseband solution for mobile handsets. ... We believe that a final settlement with Samsung remains the most critical objective for InterDigital management to focus on over the next three to six months. 

Link here:

March 1, 2007 Updated Report

Tom Carpenter reiterates his rating to Long-term buy and reiterates his share price target of $40,  CEO Bill Merritt is on record that InterDigital will sign a 3G license with at least one major handset manufacturer in 2007. We believe IDCC can parlay its $175 million to $200 million 2G arbitrtion award with Samsung into a combined 2G and 3G license. In addition, Sony Ericsson and IDCC have a good working relationship, which could result is a 3G license in 2007.

Archived previous updates:

December 8, 2006    Updated Report

Tom Carpenter RAISES his rating to Long-term BUY and RAISES his share PRICE TARGET to $40, citing a number of reasons, including: *Share price pullback presents buying opportunity. IDCC now undervalued; * IDCC will ultimately collect on its 2G money owed ($150-$200 million) by Samsung, as it did from Nokia. Could possibly negotiate settlement that includes 3G; * IDCC is investing heavily in product development that could complement its licensing activity; * IDCC is in the enviable position of generating more cash flow than it needs to fund its current business model. Cash at end of 3Q 2006 is $5.58 per share; * Believes the firm can earn between $0.50 and $1.25 per handset sold by licensees; * InterDigital's annual earnings share in the $2 to $3.50 range. * IDCC could sign 3G licensing agreements with two major manufacturers in 2007 (probably Sony Ericsson and Samsung) with Nokia potentially signing in late 2007 or 1H 2008 and Motorola in 2008;   * Risk: the increasingly contentious licensing landscape throughout the industry.

November 6, 2006  Updated Report

Upping rating to neutral from underperform on (recent) share price pullback. We regard the news regarding Samsung continuing to fight IDCC's $175 million to $200 million 2G arbitration award dampened expectations that IDCC and Samsung could craft a combined 2G and 3G licensing agreement (at least in the near term). We believe industry-wide licensing may remain at a standstill until Nokia and Qualcomm resolve their 3G licensing dispute, thus hampering IDCC's 3G licensing efforts.

September 6, 2006   Updated Report

Link here to:

Boenning & Scattergood: Michael Ciarmoli and Bradley Mook  February 28, 2007 Updated Report

Reiterating our Market Outperform rating and raising our price target to $43 on shares of IDCC. Although the quarterly results may have been fairly muted we believe IDCC is making great strides towards capturing royalties from the budding 3G marketplace. Furthermore, we believe the company's product development business will eventually be a solid compliment to its licensing business, allowing for an additional method of capturing revenue from the sizable wireless market.  In January we named InterDigital one of our Top Picks for 2007 and we remain confident in that selection.

Archived previous reports:

December 21, 2006 Updated Report    Michael F Ciarmoli and Bradley L Mook reiterate their "outperform" rating and $39  share price target.   Investment Conclusion: We believe InterDigital is well positioned to grow its recurring royalty revenues by licensing 3G and emerging next generation wireless technologies to mobile handset OEMs.
* This morning SK Telecom announced it has chosen InterDigital Communications to develop a system/software solution designed to support nationwide handover between WiBro and UMTS networks throughout Korea. We believe this is a significant event for InterDigital for two reasons:
* First, InterDigital's patent portfolio has additional monetization opportunities beyond the current 3G efforts which seems to be garnering most of the Street's attention right now. In our opinion convergence is inevitable, as numerous 802.X and other wireless protocols emerge as next generation mobile technologies. InterDigital is firmly positioned with a base of 802.21 patents - technology that supports media independent handover - that will not only provide a critical interoperability role in Korea, but should also be transferable to other geographies as build-outs progress.
* Second, we view this event as a major step in successfully building the company's technology solutions business segment.
* We reiterate our Market Outperform rating on shares of IDCC. We continue to remain confident that InterDigital will have success in signing new 3G licensees and that the company's prospects of monetizing its vast IP portfolio are intact. Additionally, we believe the Samsung settlement will be resolved in 2007 in the form of a straight 2G settlement or 2G/3G combination. Our 12 month price target of $39 is base on a sum of the parts analysis which can be found on page 3.

December 6, 2006 Updated Report  Michael F Ciarmoli and Bradley L Mook reiterate their "outperform" rating and $39 share price target. InterDigital is well positioned to grow its recurring royalty revenues by licensing 3G and emerging next generation wireless technologies to mobile handset OEMs. Recurring royalty revenues have grown steadily over the past six quarters and although the timing of future licensing deals and threat of litgation is a concern, we believe that investors should have confience that these revenue strams will continue to grow.

November 2, 2006 Updated Report   Reiterates Outperform  InterDigital is well positioned to grow its recurring royalty revenues by licensing 3G and emerging next generation wireless techniologies to mobile handset OEM's. Recurring royalty revenues have grown steadily over the past six quarters and although the timing of future licensing deal and the threat of litigation is a concern, we believe investors should have confidence that these revenue streams will continue to grow,

August 3, 2006 updated report  "InterDigital reported 2Q06 results that exceeded the Company's guidance, the consensus estimate, as well as our estimates.... InterDigital's forward-looking philosophy and active involvement in numerous standards bodies should lead to further licensing deals."

Note: On September 6, 2006, analysts reportedly reiterated "outperform" rating and raised share price target to $41. However WL has not been able to confirm this