Company Overview
Acacia Research Corporation functions as an acquirer and operator of businesses spanning industrial, energy, and technology sectors across the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. The company organizes its operations into four distinct segments, specifically including Intellectual Property Operations, Industrial Operations, and Energy, alongside a fourth segment implied by the operational structure. This entity is classified within the Industrials sector and specifically operates in the Business Equipment & Supplies industry, positioning it as a provider of essential equipment and supplies within these global markets. As of the latest data, the company holds a market capitalization of $486.24M and generates annual revenue of $285.23M, supported by an employee base of 986 individuals. These valuation and revenue figures indicate that Acacia Research operates as a mid-cap enterprise with a substantial operational footprint, suggesting a company that has achieved significant scale while maintaining a relatively lean workforce compared to its revenue generation capabilities.
Financial Health
Acacia Research Corporation reported a trailing twelve-month revenue of $285.23M, with a corresponding net income of $21.68M and an EBITDA of $51.49M. The gap between the $285.23M in revenue and the $21.68M in net income reveals a cost structure where non-interest expenses and taxes consume a significant portion of top-line earnings, leaving a profit margin of 7.6%. The company generated free cash flow of $30.70M over the trailing twelve months, which indicates a positive ability to generate cash from operations sufficient to cover capital expenditures and maintain financial flexibility without relying heavily on external financing. When analyzing profitability efficiency, the gross margin stands at 29.6%, reflecting the proportion of revenue remaining after direct costs of goods sold are deducted. However, the operating margin is reported at -26.1%, which signals that operating expenses currently exceed gross profit, while the net profit margin of 7.6% demonstrates that non-operating income or other factors offset these operational losses to produce a positive bottom line. Regarding liquidity and leverage, the company holds $361.02M in cash against $105.64M in debt, resulting in a debt-to-equity ratio of 18.09, which highlights a highly leveraged balance sheet structure where debt obligations are substantial relative to shareholder equity. Despite the high leverage, the current ratio of 9.18 indicates exceptionally strong short-term liquidity, suggesting the company possesses ample current assets to cover its current liabilities many times over. Return on Equity is calculated at 4.3% and Return on Assets is 0.5%, metrics that reveal management effectiveness is currently constrained by the high debt load and the specific mix of operating expenses affecting asset utilization.
Valuation Assessment
The valuation metrics for Acacia Research Corporation show a Trailing P/E ratio of 22.91 and a Forward P/E of -9.51. The significant divergence between the positive trailing P/E and the negative forward P/E implies that the market expects earnings to turn negative in the future, likely driven by the currently negative operating margin, which distorts the forward earnings calculation. The Price to Book ratio is 0.89, indicating that the market values the company at less than its book value, suggesting a discount relative to the net asset position or potential asset impairment concerns. Alternative valuation metrics provide additional context, with a Price to Sales ratio of 1.70 and an EV/EBITDA of 5.27, which suggests the market is pricing the company based on its sales volume and strong EBITDA generation despite the operating margin compression. In terms of trading range, the 52-week high is $5.21 and the 52-week low is $2.70, meaning the stock is trading in a range that reflects volatility but remains below its annual peak. The Beta is 0.54, which indicates that the stock's price volatility is significantly lower than the broader market, suggesting it may be less sensitive to general market movements.
Growth & Income
Revenue growth year-over-year is recorded at 2.6%, while earnings growth is listed as N/A due to the lack of prior comparable earnings data or the negative operating margin impacting the calculation. Since earnings growth is not available as a positive figure and is effectively N/A, it implies that earnings are not currently growing faster than revenue; rather, the relationship is complicated by the negative operating margin which prevents standard growth comparisons. Regarding income distribution, the company does not pay a dividend, evidenced by a Dividend Yield of N/A and a Payout Ratio of 0.0%. This zero payout ratio confirms that the company reinvests all available earnings and free cash flow into growth initiatives, debt reduction, or operational expansion rather than distributing cash to shareholders. Consequently, the overall growth and income profile is characterized by modest revenue expansion and a reliance on internal capital generation for development, with no current income support for investors seeking yield.