Is Cannacord being too bearish? No. They can do math. Cannacord just highlights that the stock is priced for perfection.
ITS
Current ITS earnings is $4M a quarter. They assume it grows by 50% by the end of next year. That has already been priced in. This would also compress the multiple if they don't grow by 50% to at least 9X
If they achieve flat growth the target decreases from:
$2.50 -> $1.85 (earnings miss)
$1.85 -> $1.55 (multiple compression)
WiLan
Assume WiLan is sold for $90M. If they achieve Blackberry pricing per patent it is $40M.
If they achieve Blackberry pricing the stock decreases from:
$2.50 -> $2.05
Together
If ITS is flat and WiLan is sold for Blackberry pricing the stock is $2.50 -> $1.10... this is the bear case for Quarterhill. $0.10 above Todd Coupland's downside case of $1.00
This is why this is a hold (sell). Not much upside here and 55% downside.