Comparing InterDigital (NASDAQ:IDCC) and Xperi (NYSE:XPER)

InterDigital (NASDAQ:IDCC) and Xperi (NYSE:XPER) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Institutional and Insider Ownership

99.8% of InterDigital shares are owned by institutional investors. Comparatively, 94.3% of Xperi shares are owned by institutional investors. 3.5% of InterDigital shares are owned by company insiders. Comparatively, 3.2% of Xperi shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares InterDigital and Xperi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
InterDigital	38.32%	28.17%	15.00%
Xperi	-7.12%	4.04%	2.72%

Valuation & Earnings

This table compares InterDigital and Xperi”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
InterDigital	$834.02 million	10.15	$406.64 million	$8.67	37.84
Xperi	$448.11 million	0.54	-$56.34 million	($0.70)	-7.15

InterDigital has higher revenue and earnings than Xperi. Xperi is trading at a lower price-to-earnings ratio than InterDigital, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for InterDigital and Xperi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
InterDigital	0	0	3	1	3.25
Xperi	1	1	2	0	2.25

InterDigital presently has a consensus target price of $450.00, suggesting a potential upside of 37.17%. Xperi has a consensus target price of $11.00, suggesting a potential upside of 119.78%. Given Xperi’s higher possible upside, analysts clearly believe Xperi is more favorable than InterDigital.

Risk & Volatility

InterDigital has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, Xperi has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Summary

InterDigital beats Xperi on 14 of the 15 factors compared between the two stocks.

About InterDigital

InterDigital, Inc. operates as a global research and development company with focus primarily on wireless, visual, artificial intelligence (AI), and related technologies. The company engages in the design and development of technologies that enable connected in a range of communications and entertainment products and services, which are licensed to companies providing such products and services, including makers of wireless communications, consumer electronics, IoT devices, and cars and other motor vehicles, as well as providers of cloud-based services, such as video streaming. It designs and develops a range of innovations for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company also develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G, 5G, advanced and 6G, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. In addition, it provides video coding and transmission technologies; and engages in the research and development of artificial intelligence and machine learning solutions. Further, the company's patented technologies are used in various products that include smartphones, tablets, consumer electronics, and base stations; televisions, laptops, gaming consoles, set-top boxes, streaming devices, and connected automobiles. InterDigital, Inc. was incorporated in 1972 and is headquartered in Wilmington, Delaware.

About Xperi

Xperi Holding Corporation, together with its subsidiaries, operates as a consumer and entertainment product/solutions licensing company worldwide. It operates through two segments, Product, and Intellectual Property Licensing. The company invents, develops, and delivers various technologies. It licenses audio, digital radio, imaging, edge-based machine learning, and multi-channel video user experience solutions to consumer electronics customers, automotive manufacturers, or supply chain partners. The company also provides licensing to multichannel video programming distributors, OTT video service providers, consumer electronics manufacturers, social media, and other new media companies in media industry; and memory, sensors, RF component, and foundry companies in semiconductor industry. It provides its technologies under the DTS, HD Radio, IMAX Enhanced, Invensas, TiVo, and Perceive brands. The company is headquartered in San Jose, California.