Quarterhill Inc T.QTRH

M partners raises target to 4.25

[v_guerriero]

M Partners met with Brett Kidd.  Here are the key points.  They raised target this morning after the meeting.

Key points:
- Blackberry transaction was done at 6X TTM revenue.  Implies WiLan could be worth $280M.  They have it modeled at $230M underpinning the $4.25 target.  Implies a $4.75 target price if achieve BlackBerry multiple.

- Raise 2022 ITS revenue to 212M and EBITDA to $31M based on the recent wins.  The two deals added $25M in annual revenue.

- Kidd implied that there are two large additional contracts in the near term pipeline.  Once those are announced M Partners will raise targets further.

- Estimate ITS will represent 80% of revenue.  Believe investors seeing this will be a crucial step in rebranding Quarterhill as an ITS business.

- Model Sale of WiLan and Apple proceeds to provide more than $400M of capital in addition to $80M on the balance sheet to fund an aggressive M&A agenda.

- Believe it is significantly undervalued trading at 8X EBITDA.

[Fortuna]

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[cactuseskimo]

I don't know that I've ever seen a company issue a PR because of a firm updating their price target. Maybe it happens, but not often. Solid, solid update though from M Partners with some very juicy tidbits!  

[v_guerriero]

The stock should be $3.25 just to match other ITS firm multiples right now.  This research confirms the upside beyond that.  And the upside is very significant.    The unprofitable tech beatdown is keeping QTRH on sale.  

[barneyj44]

Great info , much appreciated V

[Jimmycash]

Thanks for the update v_g. I can't find the article...could you post for us?  Thanks