If we use to assume that return on equity ratios hold strong for the next three years, then the book value could reach up to $38.38 per share. The 3 year price-to-book average is 7.44, which gives us a potential price of $285.55 per share in 36 months. This is over 5.8x higher than the current price of $48.53, which is a 488% pop. Of course, the industry average price-to-book ratio is 1.7. This is quite a big valuation drop if IDCC is simply reverting to the industry average. This would represent a meager 34% increase in 3 years provided the return on equity stays strong. If we use the current ratio of 6.13 we get a share price of $172.75, which is still almost 5 times the current price."
It makes for exciting reading. Just don't get to carried away by his projections.
Applying a numerical factor to future events rarely works. When the earnings go up dramatically, the market usually compensates by dropping the PE ratio. Same thing here -- read the growth to value caveat and tread carefully.