Value
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.8 |
| P/S | 7.0 |
| EV/EBITDA | 6.5 |
| Fwd P/E | 8.7 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 12.9x
- ▸PEG: 0.28
- ▸Attractively valued
ADEA · Why this verdict
Why Adeia (ADEA) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score7.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Adeia is a high-quality technology licensor (ROE 28%, 26% margins, 159% FCF/NI, wide moat) at a forward P/E of 13.4x with 70.5% upside to the analyst target, but it relies on its top-5 customers for 55.7% of revenue and reports earnings in 1 day. A small starter position fits, after the print.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Adeia trades at a forward P/E of 13.4x with a PEG of 0.29 and earnings growth scoring 10 out of 10, which is attractively valued. Valuation breakdown | Forward P/E stays below 16x as earnings continue to grow. | →Stable |
| CounterA PEG this low may rest on earnings estimates that depend on renewals from a small group of customers. | ||
The top 5 customers account for 55.7% of revenue, so the loss or renegotiation of a single license could hit results hard. Bear case | Top-5 customer share falls below 50% or key licenses are renewed on current terms. | ↓Deteriorating |
| CounterLicensing disputes with large customers are common in this business and can lead to litigation and revenue gaps. | ||
Adeia earns an ROE of 28% with 26% margins, 159% FCF/NI, a wide moat and a Piotroski F-Score of 8/9. Quality breakdown | ROE stays above 22% and margins stay above 22% over the next 12 months. | →Stable |
| CounterLicensing revenue can be lumpy, as shown by quarterly EPS swinging between $0.28 and $0.86. | ||
The price of $21.44 is 70.5% below the $36.55 analyst target, against 10.0% downside to the stop, a reward-to-risk of 7.1. Targets | The price moves toward the analyst target as earnings confirm growth. | →Stable |
| CounterThe price sits below its 200-day average, and an upside figure this large may reflect a stale target the market no longer believes. | ||
Adeia beat estimates in 3 of the last 4 quarters (most recently $0.34 versus $0.31), but missed in November 2025 ($0.28 versus $0.34), and earnings are due in 1 day. Earnings | The November 2 report beats the consensus estimate. | ↑Improving |
| CounterWith 89% implied volatility and 11% short interest, a miss could trigger a sharp drop before the quality case plays out. | ||
Adeia trades at a forward P/E of 13.4x with a PEG of 0.29 and earnings growth scoring 10 out of 10, which is attractively valued.
→StableValuation breakdown
- Expectation
- Forward P/E stays below 16x as earnings continue to grow.
CounterA PEG this low may rest on earnings estimates that depend on renewals from a small group of customers.
The top 5 customers account for 55.7% of revenue, so the loss or renegotiation of a single license could hit results hard.
↓DeterioratingBear case
- Expectation
- Top-5 customer share falls below 50% or key licenses are renewed on current terms.
CounterLicensing disputes with large customers are common in this business and can lead to litigation and revenue gaps.
Adeia earns an ROE of 28% with 26% margins, 159% FCF/NI, a wide moat and a Piotroski F-Score of 8/9.
→StableQuality breakdown
- Expectation
- ROE stays above 22% and margins stay above 22% over the next 12 months.
CounterLicensing revenue can be lumpy, as shown by quarterly EPS swinging between $0.28 and $0.86.
The price of $21.44 is 70.5% below the $36.55 analyst target, against 10.0% downside to the stop, a reward-to-risk of 7.1.
→StableTargets
- Expectation
- The price moves toward the analyst target as earnings confirm growth.
CounterThe price sits below its 200-day average, and an upside figure this large may reflect a stale target the market no longer believes.
Adeia beat estimates in 3 of the last 4 quarters (most recently $0.34 versus $0.31), but missed in November 2025 ($0.28 versus $0.34), and earnings are due in 1 day.
↑ImprovingEarnings
- Expectation
- The November 2 report beats the consensus estimate.
CounterWith 89% implied volatility and 11% short interest, a miss could trigger a sharp drop before the quality case plays out.
Per-dimension breakdown
Quality
9.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.3 |
| ROA | 8.7 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 9.8 |
| FCF quality | 10.0 |
| Moat | 7.5 |
| Rule of 40 | 8.7 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 28%
- ▸Strong margins: 26%
- ▸Excellent cash conversion: 159% FCF/NI
- ▸Wide economic moat
Growth
7.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.5 |
| EPS growth | 10.0 |
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 7.1 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 9.5 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+4.7%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 5.0 |
| Price target | 10.0 |
- ▸Analyst upside: 108%
Insider
7.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 9.2 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 8.2 |
| growth rank | 4.3 |
- ▸Best-in-class margins
Technical
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.2 |
| support resistance | 8.8 |
| 52w position | 2.1 |
| gap | 5.0 |
Risk (lower is worse)
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.4 |
| days to cover | 4.4 |
| volatility | 0.0 |
| put call | 8.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 7.0 |
| debt equity | 6.0 |
- ▸High IV: 90%
- ▸Above max pain $12
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| surprise avg | 4.1 |
| dividend safety | 6.8 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.28, quality 9.3/10, growth 7.8/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:4.7>=4.5
- ASYMMETRY:6.8>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
6.79
Upside
+76.8%
Downside
11.3%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.3B<$5B
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 9.3 and growth 7.8 both clear their thresholds, with asymmetric R:R of 6.79 supporting the read.
The strongest dimensions are Quality at 9.3, Value at 8.2, and Growth at 7.8; the weakest are Risk (lower is worse) at 4.1, Momentum at 4.7, and Peer rank at 5.2. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 6.79 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Licensing Economics
Trip ifROE falls below 18% from the current 28%.
- P2Attractive Peg Valuation
Trip ifForward P/E exceeds 18x from the current 13.4x.
- P3Large Upside To Analyst Target
Trip ifPrice falls to $19.72 or below, from the current $21.44.
- P4Top Five Customer Concentration
Trip ifTop-5 customer share exceeds 65% of revenue from the current 55.7%.
- P5Earnings Record Binary Event
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.