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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 63.9GRADE B
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
1.4%
Sector: 8.5%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, ACACIA RESEARCH CORP (ACTG) receives a "Hold" rating with a composite score of 54.6/100, ranked #381 out of 4446 stocks. Key factor scores: Quality 64/100, Value 47/100, Momentum 67/100. This is quantitative analysis only — not investment advice.
ACACIA RESEARCH CORP (ACTG) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ACACIA RESEARCH CORP Do?
Acacia Research Corporation, together with its subsidiaries, invests in intellectual property and related absolute return assets; and engages in the licensing and enforcement of patented technologies. The company operates through two segments, Intellectual Property Operations and Industrial Operations. The company owns or controls the rights to various patent portfolios, which include U.S. patents and foreign counterparts covering technologies used in a range of industries. It has executed approximately 1,600 license agreements, and approximately 200 patent portfolio licensing and enforcement programs. It also designs manufactures printers and parts, and consumable products through dealers and distributors for various industrial printing applications. In addition, the company offers supply-chain printing solutions for manufacturing, transportation and logistics, retail distribution, food and beverage distribution, and pharmaceutical distribution industries; and line matrix printers for mission critical applications within labeling and inventory management, build sheets, invoicing, manifests and bills of lading, and reporting industries. Acacia Research Corporation was incorporated in 1993 and is based in New York, New York. ACACIA RESEARCH CORP (ACTG) is classified as a small-cap stock in the Financials sector, specifically within the Trading industry. The company is led by CEO Martin D. McNulty and employs approximately 290 people, headquartered in NEWPORT BEACH, New York. With a market capitalization of $482M, ACTG is one of the notable companies in the Financials sector.
ACACIA RESEARCH CORP (ACTG) Stock Rating — Hold (April 2026)
As of April 2026, ACACIA RESEARCH CORP receives a Hold rating with a composite score of 54.6/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.ACTG ranks #381 out of 4,446 stocks in our coverage universe. Within the Financials sector, ACACIA RESEARCH CORP ranks #199 of 892 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
ACTG Stock Price and 52-Week Range
ACACIA RESEARCH CORP (ACTG) currently trades at $4.90. The stock lost $0.16 (3.2%) in the most recent trading session. The 52-week high for ACTG is $5.21, which means the stock is currently trading -6.0% from its annual peak. The 52-week low is $2.70, putting the stock 81.5% above its annual trough. Recent trading volume was 142K shares, suggesting relatively thin trading activity.
Is ACTG Overvalued or Undervalued? — Valuation Analysis
ACACIA RESEARCH CORP (ACTG) carries a value factor score of 47/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 58.80x, compared to the Financials sector average of 15.44x — a premium of 281%. The price-to-book ratio stands at 0.81x, versus the sector average of 1.26x. The price-to-sales ratio is 1.83x, compared to 0.93x for the average Financials stock. On an enterprise value basis, ACTG trades at 61.23x EV/EBITDA, versus 3.37x for the sector.
Overall, ACTG's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
ACACIA RESEARCH CORP Profitability — ROE, Margins, and Quality Score
ACACIA RESEARCH CORP (ACTG) earns a quality factor score of 64/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 1.4%, compared to the Financials sector average of 8.5%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 1.0% versus the sector average of 1.2%.
On a margin basis, ACACIA RESEARCH CORP reports gross margins of 22.9%. The operating margin is -12.1% (sector: 21.9%). Net profit margin stands at -9.5%, versus 17.7% for the average Financials stock. Revenue growth is running at 130.1% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
ACTG Debt, Balance Sheet, and Financial Health
ACACIA RESEARCH CORP has a debt-to-equity ratio of 16.0%, compared to the Financials sector average of 121.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 9.18x, indicating strong short-term liquidity. Total debt on the balance sheet is $92M. Cash and equivalents stand at $302M.
ACTG has a beta of 0.72, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ACACIA RESEARCH CORP is 68/100, reflecting average volatility within the normal range for its sector.
ACACIA RESEARCH CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, ACACIA RESEARCH CORP reported revenue of $258M and earnings per share (EPS) of $0.23. Net income for the quarter was $8M. Gross margin was 22.9%. Operating income came in at $9M.
In FY 2025, ACACIA RESEARCH CORP reported revenue of $285M and earnings per share (EPS) of $0.23. Net income for the quarter was $24M. Gross margin was 29.6%. Revenue grew 133.2% year-over-year compared to FY 2024. Operating income came in at $6M.
In Q3 2025, ACACIA RESEARCH CORP reported revenue of $59M and earnings per share (EPS) of $-0.03. Net income for the quarter was $-2M. Gross margin was 21.2%. Revenue grew 155.0% year-over-year compared to Q3 2024. Operating income came in at $-6M.
In Q2 2025, ACACIA RESEARCH CORP reported revenue of $51M and earnings per share (EPS) of $-0.03. Net income for the quarter was $-1M. Gross margin was 12.8%. Revenue grew 98.3% year-over-year compared to Q2 2024. Operating income came in at $-12M.
Over the past 8 quarters, ACACIA RESEARCH CORP has demonstrated a growth trajectory, with revenue expanding from $26M to $258M. Investors analyzing ACTG stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
ACTG Dividend Yield and Income Analysis
ACACIA RESEARCH CORP (ACTG) does not currently pay a dividend. This is common among smaller companies in the Trading industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Financials dividend stocks may want to explore other Financials stocks or use the stock screener to filter by dividend yield.
ACTG Momentum and Technical Analysis Profile
ACACIA RESEARCH CORP (ACTG) has a momentum factor score of 67/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 21/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 28/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
ACTG vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing ACTG against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full ACTG vs S&P 500 (SPY) comparison to assess how ACACIA RESEARCH CORP stacks up against the broader market across all factor dimensions.
ACTG Next Earnings Date
No upcoming earnings date has been announced for ACACIA RESEARCH CORP (ACTG) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy ACTG? — Investment Thesis Summary
ACACIA RESEARCH CORP presents a balanced picture with arguments on both sides. The quality score of 64/100 indicates above-average profitability and business fundamentals. Price momentum is positive at 67/100, suggesting the trend favors buyers. Low volatility (stability score 68/100) reduces downside risk.
In summary, ACACIA RESEARCH CORP (ACTG) earns a Hold rating with a composite score of 54.6/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on ACTG stock.
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Institutional Research Dossier
ACACIA RESEARCH CORP (ACTG) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Acacia Research Corporation (ACTG) receives a Hold rating, justified by its complex business model and mixed financial performance. While the company exhibits a strong balance sheet and recent revenue growth, concerns arise from negative free cash flow, inconsistent profitability, and a valuation that appears stretched relative to its sector peers. The key takeaway is that ACTG's future hinges on its ability to consistently monetize its intellectual property assets and effectively manage its industrial operations, a feat that remains uncertain given its volatile historical performance.
The company's transition from a pure-play patent licensing firm to one with industrial operations adds another layer of complexity. While the diversification aims to stabilize revenue streams, it also introduces operational risks and capital allocation challenges. Investors should closely monitor ACTG's ability to integrate and optimize its industrial assets while simultaneously navigating the unpredictable landscape of intellectual property licensing and enforcement.
Business Strategy & Overview
Acacia Research Corporation operates through two distinct segments: Intellectual Property Operations and Industrial Operations. The Intellectual Property Operations segment focuses on acquiring, licensing, and enforcing patents across various industries. This involves identifying potentially infringed patents, negotiating licensing agreements, and, when necessary, pursuing litigation to protect its intellectual property rights. The success of this segment depends on the quality of its patent portfolio, its ability to identify infringers, and its legal expertise in patent law.
The Industrial Operations segment, on the other hand, designs, manufactures, and sells printers, parts, and consumable products for industrial printing applications. This segment serves a diverse range of industries, including manufacturing, transportation, logistics, retail, and pharmaceuticals. The company offers supply-chain printing solutions and line matrix printers for mission-critical applications. This segment's performance is tied to the demand for industrial printing solutions, its ability to innovate and develop competitive products, and its distribution network.
Acacia's strategy appears to be a diversification play, aiming to reduce its reliance on the unpredictable nature of patent licensing revenue. By acquiring and operating industrial businesses, the company seeks to generate more stable and recurring revenue streams. However, this diversification also introduces new challenges, including managing a more complex business, integrating different operational cultures, and competing in established industrial markets.
The company has executed approximately 1,600 license agreements and 200 patent portfolio licensing and enforcement programs, demonstrating its experience in the IP space. However, the financial results have been inconsistent, suggesting that the success of these programs varies significantly. The industrial operations segment is relatively new, and its contribution to overall profitability remains to be seen. Acacia's future success depends on its ability to effectively manage both segments and capitalize on synergies between them.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
130.1%
Sector: 9.4%
+1290% VS SCTR
Economic Moat Analysis
Acacia Research's economic moat is difficult to definitively classify, leaning towards a Narrow moat. In its Intellectual Property Operations segment, the company benefits from intangible assets in the form of its patent portfolio. However, the strength of this moat is highly dependent on the quality and enforceability of its patents, which can vary significantly. The legal landscape surrounding patent law is constantly evolving, and the value of a patent can be diminished by legal challenges or the emergence of alternative technologies. Furthermore, the success rate of patent litigation is far from guaranteed, adding uncertainty to this segment's revenue stream.
In the Industrial Operations segment, Acacia faces intense competition from established players with significant scale and brand recognition. While the company may have some proprietary technology in its printers and related products, it is unlikely to possess a sustainable cost advantage or a network effect that would create a wide moat. Switching costs for customers in this segment are likely to be low, as they can easily switch to alternative suppliers if they offer better products or prices.
The company's diversification strategy, while intended to stabilize revenue, may also dilute its focus and expertise. Managing two distinct businesses with different competitive dynamics and operational requirements can be challenging. It remains to be seen whether Acacia can effectively leverage its IP assets to create a competitive advantage in the industrial printing market.
Overall, Acacia's moat is fragile and subject to various risks. The value of its patent portfolio can fluctuate significantly, and its industrial operations face stiff competition. While the company has demonstrated some success in monetizing its IP assets, its ability to generate consistent and sustainable profits remains uncertain. Therefore, a Narrow moat classification seems most appropriate, reflecting the company's limited and vulnerable competitive advantages.
Financial Health & Profitability
Acacia Research's financial health presents a mixed picture. The company boasts a strong balance sheet, with $301.78 million in total cash and only $91.90 million in total debt, resulting in a low debt-to-equity ratio of 16.00, significantly lower than the sector average of 115.00. The current ratio of 9.18 indicates excellent short-term liquidity, suggesting the company can easily meet its immediate obligations. However, the income statement and cash flow statement reveal some concerning trends.
While revenue has grown significantly, with a TTM revenue of $285.23 million and a revenue growth rate of 130.1% compared to the sector average of 9.3%, profitability remains inconsistent. The company reported a net income of $24.47 million for the TTM period, but this is largely driven by a strong Q1 FY2025. The subsequent two quarters, Q2 and Q3 FY2025, showed net losses. Furthermore, the company's operating margin of -12.1% and net margin of -9.5% are significantly below the sector averages of 22.0% and 17.8%, respectively. This suggests that the company is struggling to translate revenue growth into sustainable profits.
The company's free cash flow is also a major concern, with a TTM free cash flow of -$71.97 million. This indicates that the company is burning cash, which is unsustainable in the long run. The negative free cash flow may be due to investments in its industrial operations or increased litigation expenses in its IP segment. However, it raises questions about the company's ability to generate sufficient cash to fund its operations and growth initiatives.
The company's ROE of 1.4% is significantly lower than the sector average of 8.5%, indicating that the company is not efficiently utilizing its equity to generate profits. The gross margin of 22.9% is also relatively low, suggesting that the company's cost of goods sold is high. Overall, while Acacia Research has a strong balance sheet and impressive revenue growth, its inconsistent profitability and negative free cash flow raise concerns about its long-term financial health. The company needs to improve its operational efficiency and cash flow generation to justify its current valuation.
Valuation Assessment
Acacia Research's valuation appears stretched relative to its sector peers and historical performance. The company's P/E ratio of 21.1x is higher than the Financials sector average of 15.5x, suggesting that investors are paying a premium for its earnings. Similarly, its EV/EBITDA ratio of 21.8x is significantly higher than the sector average of 3.5x, indicating that the company is overvalued based on its earnings before interest, taxes, depreciation, and amortization.
Given the company's inconsistent profitability and negative free cash flow, these valuation multiples appear even more concerning. While the company has experienced strong revenue growth, its inability to translate this growth into sustainable profits raises questions about its long-term earnings potential. The high valuation multiples suggest that investors are expecting significant improvements in profitability and cash flow generation in the future, which may not materialize.
A discounted cash flow (DCF) analysis would be challenging to perform accurately due to the volatility of Acacia's earnings and cash flows. However, based on the available data, it is difficult to justify the company's current market capitalization of $467.91 million. The company's negative free cash flow and low ROE suggest that its intrinsic value may be lower than its market value.
Overall, Acacia Research's valuation appears expensive relative to its growth, its history, and its sector. The company's high valuation multiples are not supported by its current financial performance, particularly its inconsistent profitability and negative free cash flow. Investors should exercise caution and carefully consider the risks before investing in this stock.
Risk & Uncertainty
Acacia Research faces several specific, idiosyncratic risks that could negatively impact its business and financial performance. One of the primary risks is the uncertainty surrounding its Intellectual Property Operations segment. The success of this segment depends on the quality and enforceability of its patent portfolio, which can be affected by legal challenges, technological obsolescence, and changes in patent law. Patent litigation is inherently unpredictable, and the company may incur significant legal expenses without achieving a favorable outcome. A negative ruling in a key patent case could significantly reduce the value of its patent portfolio and negatively impact its revenue.
Another significant risk is the integration and management of its Industrial Operations segment. This segment faces intense competition from established players with greater scale and resources. The company may struggle to compete effectively in this market, which could lead to lower revenue and profitability. Furthermore, the company may face challenges in integrating the operations of its acquired industrial businesses, which could disrupt its supply chain and increase its operating costs.
The company's reliance on a relatively small number of key customers in its Industrial Operations segment also poses a concentration risk. The loss of one or more of these key customers could significantly reduce its revenue and profitability. The company needs to diversify its customer base to mitigate this risk.
Finally, the company's negative free cash flow is a major concern. If the company is unable to improve its cash flow generation, it may need to raise additional capital through debt or equity financing, which could dilute existing shareholders or increase its financial leverage.
Bulls Say / Bears Say
The Bull Case
BULL VIEWAcacia's diversification into industrial operations provides a more stable revenue base, reducing reliance on the unpredictable nature of patent licensing.
BULL VIEWThe company's strong balance sheet, with ample cash and low debt, provides financial flexibility to pursue acquisitions and growth initiatives.
BULL VIEWAcacia's expertise in intellectual property and its history of successful patent enforcement position it to capitalize on future licensing opportunities.
The Bear Case
BEAR VIEWAcacia's negative free cash flow and inconsistent profitability raise serious concerns about its long-term financial sustainability.
BEAR VIEWThe company's high valuation multiples are not justified by its current financial performance, making the stock overvalued.
BEAR VIEWThe inherent uncertainty of patent litigation and the intense competition in the industrial printing market pose significant risks to Acacia's future success.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score ACTG and 4,400+ other equities.
ACACIA RESEARCH CORP exhibits a 516% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
1.0%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
22.9%
Sector: 0.0%
Operating Margin
Core business profitability
-12.1%
Sector: 21.9%
Net Margin
Bottom-line profitability
-9.5%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
