📊 ACTG Key Takeaways
Is Acacia Research Corp. (ACTG) a Good Investment?
Despite impressive 133% revenue growth, ACTG faces fundamental profitability challenges with a -29% net margin and negative operating income of $8.4M, suggesting structural issues within the patent licensing business model. While the company maintains fortress-like balance sheet strength with $307.5M in cash and 0.17x debt/equity, minimal free cash flow generation ($1.3M on $54.2M revenue) and negative interest coverage raise questions about sustainable returns on this capital base.
Acacia Research shows strong top-line momentum and excellent cash generation, with revenue up 133.2% YoY and free cash flow of $73.15M supported by a very liquid balance sheet. However, growth quality is mixed because operating margin remains thin at 2.2%, net income was flat YoY, and weak interest coverage suggests limited earnings cushion if operating performance softens.
Acacia Research Corp. Key Strengths (ACTG)
- Exceptional revenue growth of 133% YoY demonstrates strong market demand or successful acquisitions
- Fortress balance sheet with $307.5M cash, 8.56x current ratio, and minimal leverage (0.17x debt/equity)
- Positive operating cash flow of $3.4M despite net losses indicates some underlying cash generation
- Low financial distress risk given substantial equity cushion of $528.5M
- Very strong liquidity, with $306.72M in cash and current ratio of 9.18x
- Revenue growth accelerated sharply, indicating meaningful business expansion
- Free cash flow is strong at $73.15M with a 25.6% FCF margin
ACTG Stock Risks: Acacia Research Corp. Investment Risks
- Severe unprofitability with -29% net margin and -15.4% operating margin on growing revenue base signals structural business model problems
- Negative interest coverage ratio (-4.4x) indicates difficulty servicing debt obligations from operations
- Unusually low gross margins of 22.2% for patent licensing suggest either pricing pressures, acquisition write-downs, or integration challenges
- Minimal free cash flow conversion (2.4% FCF margin) despite $307.5M cash position raises sustainability concerns
- Patent licensing sector is inherently cyclical and dependent on litigation success; high regulatory and execution risk
- Operating profitability is weak, with only a 2.2% operating margin despite large revenue growth
- Interest coverage of 0.7x indicates limited ability to cover financing costs from operating income
- Net income was flat YoY, suggesting revenue growth is not fully translating into bottom-line improvement
Key Metrics to Watch
- Operating margin trajectory toward profitability (currently -15.4%)
- Gross margin expansion and revenue quality of growth
- Free cash flow conversion and sustainability relative to capital base
- Interest coverage ratio improvement above 0x breakeven
- Patent licensing settlement pipeline and litigation win rates
- Operating margin and interest coverage
- Net income conversion from revenue growth and free cash flow consistency
Acacia Research Corp. (ACTG) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 2.4% FCF margin may limit capital allocation flexibility. Strong liquidity with a 8.56x current ratio provides a solid financial cushion.
ACTG Profit Margin, ROE & Profitability Analysis
ACTG vs Market Sector: How Acacia Research Corp. Compares
How Acacia Research Corp. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Acacia Research Corp. Stock Overvalued? ACTG Valuation Analysis 2026
Based on fundamental analysis, Acacia Research Corp. has mixed fundamental signals relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Acacia Research Corp. Balance Sheet: ACTG Debt, Cash & Liquidity
ACTG Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Acacia Research Corp.'s revenue has grown significantly by 224% over the 5-year period, indicating strong business expansion. The most recent EPS of $-0.36 indicates the company is currently unprofitable.
ACTG Revenue Growth, EPS Growth & YoY Performance
ACTG Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $54.2M | -$15.7M | $-0.16 |
| Q3 2025 | $23.3M | -$2.7M | $-0.03 |
| Q2 2025 | $25.8M | -$3.3M | $-0.03 |
| Q1 2025 | $24.3M | -$186.0K | $0.00 |
| Q3 2024 | $10.1M | $1.6M | $-0.03 |
| Q2 2024 | $7.9M | -$8.4M | $-0.08 |
| Q1 2024 | $14.8M | -$186.0K | $0.00 |
| Q3 2023 | $10.1M | $1.6M | $0.02 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Acacia Research Corp. Dividends, Buybacks & Capital Allocation
ACTG SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Acacia Research Corp. (CIK: 0000934549)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ACTG
What is the AI rating for ACTG?
Acacia Research Corp. (ACTG) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 73% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ACTG's key strengths?
Claude: Exceptional revenue growth of 133% YoY demonstrates strong market demand or successful acquisitions. Fortress balance sheet with $307.5M cash, 8.56x current ratio, and minimal leverage (0.17x debt/equity). ChatGPT: Very strong liquidity, with $306.72M in cash and current ratio of 9.18x. Revenue growth accelerated sharply, indicating meaningful business expansion.
What are the risks of investing in ACTG?
Claude: Severe unprofitability with -29% net margin and -15.4% operating margin on growing revenue base signals structural business model problems. Negative interest coverage ratio (-4.4x) indicates difficulty servicing debt obligations from operations. ChatGPT: Operating profitability is weak, with only a 2.2% operating margin despite large revenue growth. Interest coverage of 0.7x indicates limited ability to cover financing costs from operating income.
What is ACTG's revenue and growth?
Acacia Research Corp. reported revenue of $54.2M.
Does ACTG pay dividends?
Acacia Research Corp. does not currently pay dividends.
Where can I find ACTG SEC filings?
Official SEC filings for Acacia Research Corp. (CIK: 0000934549) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ACTG's EPS?
Acacia Research Corp. has a diluted EPS of $-0.16.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is ACTG's fundamental grade?
Based on our AI fundamental analysis in June 2026, Acacia Research Corp. has a C grade with 73% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is ACTG stock overvalued or undervalued?
Valuation metrics for ACTG: ROE of -3.0% (sector avg: 15%), net margin of -29.0% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is ACTG's AI grade for 2026?
Our dual AI analysis gives Acacia Research Corp. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ACTG's free cash flow?
Acacia Research Corp.'s operating cash flow is $3.4M, with capital expenditures of $2.1M. FCF margin is 2.4%.
How does ACTG compare to other Market stocks?
Vs Default sector averages: Net margin -29.0% (avg: 12%), ROE -3.0% (avg: 15%), current ratio 8.56 (avg: 1.8).