Acacia Research Corporation Stock Forecast

Acacia Research Corporation Stock Forecast: Big, bold ideas drive solutions to the world’s problems, but it’s hard to persuade innovators to create if they won’t get credit for their work. After all, why invest resources into research and development if others can copy your results and realize the profits?

A Quick Primer on Patents

Patents offer protection for inventions, granting the patent owners exclusive use of the design for a predetermined period. Competitors are prevented from profiting from your invention for the life of the patent, giving you plenty of time to establish a leadership position in the market.

The two most common types of patents are utility patents and design patents.

Utility patents protect how a product works and how it is used for 20 years from the date of filing.

Design patents offer protections around how a product looks, and they can be enforced for 15 years.

The beauty of owning a patent goes beyond exclusive ability to produce and market an original product. In fact, you can profit without producing a single item.

Many investors license their solutions to other businesses, who then bring the product to market. Licenses offer patent owners the opportunity to profit from their ideas without the need to operate a business.

Of course, just because you have a patent, there is no guarantee that others will respect the related protections. Unlicensed copies of all types of products turn up in the marketplace on a regular basis.

The bad news is that there is no patent police force out their protecting your interests, so you are responsible for addressing patent infringement on your own.

The good news is that experienced professionals are available to provide expert support, and they manage the protection of your patent from start to finish.

Acacia Research Corporation specializes in preventing patent infringement – and in putting a stop to infringements already in progress. Those considering an investment in the business want to know, is Acacia Research Corporation stock a buy?

Acacia Research Maximizes Returns for Patent Owners

Acacia Research Corporation has 25 years of experience in all things patent-related. The company invests in intellectual property and supports the owners of that property in protecting it through the patent process. It also handles the licensing of intellectual property to ensure maximum returns for the patent owner.

Perhaps most importantly, Acacia Research manages concerns with patent infringement. The company identifies situations in which others are using patented ideas for their own profit, and it pursues appropriate action to resolve the issue.

Acacia has more than 200 subsidiaries, and it has litigated more than 1,000 cases on their behalf.

Successful claims have resulted in restitution from the company responsible for the infringement.

Acacia Makes BIG Money Litigating Patent Infringement

According to the business, Acacia Research Corporation has generated more than $1.4 billion in revenue from its patent management activities since the company launched.

A little more than 50 percent of this amount has been returned to patent partners.

For better or worse, Acacia has been the subject of controversy for its method of generating revenue.

Detractors say that the company doesn’t make or build anything of its own. Instead, it brings in money from licensing patents and demanding damages for patent infringements.

Supporters say that these services are critical to protecting inventors who have invested in bringing innovations to market.

The company has had its ups and downs from a share price perspective, including a particularly dismal period in which investors saw an 83 percent drop in stock value over five years.

Acacia management has committed to turning the company around, and there are differing perspectives on whether they will succeed. The question now is what is the Acacia Research Corporation stock forecast?

Is Acacia Research Stock a Buy?

Acacia announced its third quarter 2019 results in early December. During the earnings call, it emphasized its commitment to transforming the business through new strategic direction.

A new executive leadership team was put in place to guide the company through much-needed transition. This came in response to consecutive years of significant losses on every front.

The current leaders are focused on revitalizing the company’s portfolio of assets, which has resulted in some significant sales. For example, in the third quarter, Acacia sold its position in Miso Robotics. That transaction contributed $2 million to cash reserves, which marginally strengthened the company’s financial position.

Overall, Acacia improved its cash reserves and short-term investments to $169.3 million in the third quarter, which is a $34.5 million increase year-over-year and a $4.4 million increase quarter-over-quarter.

The company is still in the process of negotiating additional licenses, which are expected to generate revenue in coming years. Unfortunately, that revenue won’t come in time to boost Acacia’s year-end results.

During the third quarter earnings call, leaders reduced full-year revenue guidance from $25 million to a range of $15 million – $20 million.

That’s not great news for current shareholders, who are already frustrated with years of poor results. They are so frustrated, in fact, that a number have launched an investigation into whether officers and directors breached their fiduciary duties or violated security laws in the course of their duties.

With so much in question at Acacia Research, there is little to suggest that this stock is a smart buy. At most, risk-tolerant investors might consider a small number of shares on the long-shot chance of an extraordinary rebound. For average investors in search of stocks that are likely to generate value in the short or long-term, Acacia is a pass.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.