Why fund managers see deep value in IPH despite weak patent filings
IPH's patent filing volumes have fallen to multi-year lows, but fund managers point to a cheap valuation and several potential FY26 recovery catalysts.
30 Apr 2026 · 5 min read
In short
IPH's Australian patent filing market share fell to 25.9% in August 2025, its lowest level in three years, alongside a 9% year-on-year decline in filing activity.
Contact Asset Management identifies catalysts for an FY26 rebound, including Canadian revenue normalisation and double-digit growth in Asian patent filings.
The stock trades on a forward price-to-earnings multiple of less than 8 times with a dividend yield above 10%, according to Contact Asset Management.
Intellectual property services group IPH delivered another disappointing result in August 2025, with Ellerston Capital's September 2025 Monthly Report detailing underlying EBITDA below market expectations, negative like-for-like performance across all regions, and an EBITDA margin of 29.2% that compressed by 290 basis points, compounding a 36% share price decline over the prior year according to Contact Asset Management.
Structural filing weakness against a deep-value valuation
Ellerston Capital's report detailed a specific alarm bell within the result: patent filing activity fell 9% year on year in August 2025, with IPH's Australian market share dropping to 25.9%, its lowest level in three years, prompting many investors to throw in the towel on the stock. Contact Asset Management's own September 2025 report attributed much of the organic revenue weakness to Canadian Intellectual Property Office processing backlogs and softer Australia and New Zealand filings, while identifying several catalysts for a potential FY26 rebound: anticipated Canadian revenue normalisation as CIPO delays resolve, double-digit growth in Asian patent filings, and cost-saving initiatives targeting $8-10 million in annualised efficiencies aimed at restoring EBITDA margins toward historical levels of around 32%.
Trading on a current year PER of 9x and a yield of 8.6%, we see deep value with a number of profit drivers ahead in FY26.
— Katana Asset Management, Monthly Report, August 2025
What managers are watching next
Contact Asset Management's valuation case centred on a forward price-to-earnings multiple of less than 8 times and a dividend yield above 10%, a combination it considers compelling relative to the potential for margin recovery once temporary regional headwinds clear. Ellerston Capital's November 2025 report detailed selectively pivoting back into underperforming stocks it had held before, including IPH, on the view they now offer a much better risk-return profile, a bet that appeared to pay off with an 11.3% contribution to April 2026 performance. With Canadian processing delays and Asian filing growth the two swing factors identified by managers, the durability of any recovery in patent filing volumes remains the key metric to watch.
Questions
Why has IPH's share price fallen so much?
IPH's share price fell around 36% over the prior year amid weak organic revenue growth, driven by Canadian Intellectual Property Office processing backlogs, softer Australia and New Zealand patent filings, and margin compression from 29.2%, down 290 basis points.
What catalysts could drive an IPH recovery?
Contact Asset Management points to anticipated Canadian revenue normalisation as CIPO processing delays resolve, double-digit growth in Asian patent filings, and cost-saving initiatives targeting $8-10 million in annualised efficiencies as potential catalysts for an FY26 rebound.
Why do fund managers see IPH as deep value?
Contact Asset Management notes IPH trades on a forward price-to-earnings multiple of less than 8 times with a dividend yield above 10%, a valuation several managers consider compelling relative to the company's potential margin recovery.
6 managers, 13 comments, with each manager's latest recorded position.
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