CIBC - ITS WORTH $2.76We base our thesis and valuation for Quarterhill on three points:
1. The IP NAV of ~US$2.45 per share is a hidden value: The licensing
opportunity of the patent portfolio is ~US$750MM (undiscounted). The Apple
jury award is excluded from our price target, but included in our NAV. We
discount this by 80% as the final value and timing are unknown.
2. Improved growth profile of its predictable revenue: Intelligent Systems’
value is $2.76/share.
3. A balance sheet to execute the plan: Pro forma net debt is ~$32MM or
~$0.28/share. It includes ~$85MM in cash and debt of $117MM