Acacia Research Corporation (ACTG) Stock Analysis & Winston Score

Acacia Research is a company that buys patents and then licenses them to other businesses. Patents are legal rights that protect inventions, and Acacia earns money by finding patents it believes are underused, acquiring them, and then charging companies fees to use those inventions legally. Its customers are typically large technology, semiconductor, and consumer electronics companies that need licenses to avoid lawsuits.

Acacia makes almost all of its revenue from licensing fees and legal settlements, which explains its very high gross margin. The company operates mainly in the United States but pursues licensing deals with companies globally. Its competitive position depends on its ability to identify valuable patents and enforce them through negotiation or litigation, which is a specialized and often unpredictable business. The main risk is that courts or regulators could weaken patent enforcement rights, or that the company fails to win licensing disputes, both of which would directly cut into its revenue.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-56.4% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-164.0% YoY

YoY Growth Rate

Earnings declining

Insider Activity

1.7%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

5+ years

Quarterly Free Cash Flow

↑ Burn rate improving

$308M cash & investments at current burn rate

Revenue declining

Acacia Research Corporation's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

91.1%

Premium pricing power — 91.1% gross margin

Operating Margin

-15.4%

Losing money on operations — -15.4%

ROCE

-1.3%

Weak — -1.3% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

-3.3%

Shrinking sales (-3.3% YoY)

EPS YoY

N/A

Data not available

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

N/A

Data not available

FCF Margin

24.4%

Converts sales into free cash efficiently (24.4%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.18

Conservative — low debt load (0.18)

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

N/M

no trend

Negative earnings — P/E not meaningful

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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