π Medium Cap Stock Pick
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$IDCC (InterDigital, Inc.)
π Publicly traded since 1981
π° Specializes in wireless, video, and AI technologies
π Headquarters in Wilmington, Delawareβ
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Financial Green Flags
Based on Earnings Report:
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Net income is up 241% Year-over-Year
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Diluted EPS are up 188% Year-over-Year
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Return-on-equity (ROE) is 15.5%
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Things to Consider
π‘ With an ROE of over 15% and a strong EBITDA margin of 78%, InterDigital is highly profitable and efficient at generating returns for its equity shareholders.
π‘ In early March, the company signed a new multi-year licensing deal with a major Chinese smartphone vendor, increasing its annualized recurring revenue outlook by $40 million.
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The Bottom Line
With a beta value of 1.4 (and due to tariff talk), InterDigital's stock has expectedly declined YTD. However, the company's significant growth metrics and strategic partnership put it in a strong defensive position against market instabilities and uncertainty.
π Medium Cap Stock Pick
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$PATH (UiPath)
π Publicly traded since 2021
π° Specializes in robotic process automation (RPA)
π Headquarters in New York, New York
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Financial Green Flags
Based on Earnings Report:
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Net income is up 52.7% Year-over-Year
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Diluted EPS are up 50% Year-over-Year
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Has exceeded EPS expectations for the last 4 quarters by double digitsβ
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Things to Consider
π‘ With a market capitalization of $7.3 billion, UiPath is well-positioned to capitalize on the growing demand for AI-driven automation solutions.
π‘ Speaking of automation solutions, the company's expansion into process mining is expected to make its offerings more attractive as they will allow customers to identify and prioritize automation opportunities, thereby enhancing operational efficiency.
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The Bottom Line
While it's true that UiPath operates in a competitive market with rapidly evolving AI technologies, it has successfully implemented a "land-and-expand" strategy where it initially secures a smaller deal with a client, then leverages that relationship to expand into larger, more profitable opportunities. This sales approach is reflected in their gradual movement towards profitability as an enterprise.
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