DB:WJL

Stock Analysis Report

Executive Summary

Quarterhill Inc. focuses on acquisition and management of technology companies that provides products and services worldwide.

Rewards

Trading at 20.5% below its fair value

Earnings are forecast to grow 30.81% per year

Risk Analysis

Dividend of 2.62% is not well covered by earnings



Snowflake Analysis

Flawless balance sheet and fair value.


Similar Companies

Share Price & News

How has Quarterhill's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WJL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.0%

WJL

1.7%

DE Communications

1.7%

DE Market


1 Year Return

55.1%

WJL

11.5%

DE Communications

15.0%

DE Market

Return vs Industry: WJL exceeded the German Communications industry which returned 11.5% over the past year.

Return vs Market: WJL exceeded the German Market which returned 15% over the past year.


Shareholder returns

WJLIndustryMarket
7 Day-3.0%1.7%1.7%
30 Day10.2%2.7%0.8%
90 Day14.0%1.7%3.7%
1 Year60.2%55.1%12.1%11.5%18.5%15.0%
3 Year-19.1%-25.8%2.8%2.4%17.1%6.9%
5 Year-32.8%-43.4%113.1%112.6%24.3%7.3%

Price Volatility Vs. Market

How volatile is Quarterhill's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Quarterhill undervalued compared to its fair value and its price relative to the market?

20.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WJL (€1.3) is trading below our estimate of fair value (€1.63)

Significantly Below Fair Value: WJL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WJL is unprofitable, so we can't compare its PE Ratio to the Communications industry average.

PE vs Market: WJL is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate WJL's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: WJL is good value based on its PB Ratio (0.8x) compared to the DE Communications industry average (3.1x).


Next Steps

Future Growth

How is Quarterhill forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

30.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WJL is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: WJL is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: WJL's is expected to become profitable in the next 3 years.

Revenue vs Market: WJL's revenue is expected to decline over the next 3 years (-4.7% per year).

High Growth Revenue: WJL's revenue is forecast to decline over the next 3 years (-4.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if WJL's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Quarterhill performed over the past 5 years?

-57.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WJL is currently unprofitable.

Growing Profit Margin: WJL is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: WJL is unprofitable, and losses have increased over the past 5 years at a rate of -57.9% per year.

Accelerating Growth: Unable to compare WJL's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: WJL is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (49.1%).


Return on Equity

High ROE: WJL has a negative Return on Equity (-7.26%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Quarterhill's financial position?


Financial Position Analysis

Short Term Liabilities: WJL's short term assets ($104.3M) exceed its short term liabilities ($27.2M).

Long Term Liabilities: WJL's short term assets ($104.3M) exceed its long term liabilities ($7.1M).


Debt to Equity History and Analysis

Debt Level: WJL's debt to equity ratio (1.9%) is considered satisfactory.

Reducing Debt: WJL's debt to equity ratio has reduced from 20.2% to 1.9% over the past 5 years.


Balance Sheet

Inventory Level: WJL has a low level of unsold assets or inventory.

Debt Coverage by Assets: WJL's debt is covered by short term assets (assets are 26.3x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable WJL has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: WJL is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 23.5% per year.


Next Steps

Dividend

What is Quarterhill's current dividend yield, its reliability and sustainability?

2.62%

Current Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.3%markettop25%3.6%industryaverage1.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: WJL's dividend (2.62%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: WJL's dividend (2.62%) is low compared to the top 25% of dividend payers in the German market (3.59%).


Stability and Growth of Payments

Stable Dividend: WJL's dividend payments have been volatile in the past 10 years.

Growing Dividend: WJL's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: WJL is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

Quarterhill has no CEO, or we have no data on them.


Leadership Team

NamePositionTenureCompensationOwnership
Prashant Watchmaker
Senior VP4.9yrsUS$418.94k0.042% $66.3k
Russ Stuebing
Senior Vice-President of Corporate Development2yrsUS$529.51kno data
David Cortens
Interim Chief Financial Officer0.3yrsno datano data
Neil Urquhart
Senior Vice-President of Human Resources0yrsno datano data
Michael Vladescu
President & CEO of New WiLAN1yrsUS$710.20k0.078% $122.3k
Randy Hanson
President & CEO of International Road Dynamics1.6yrsno datano data

1.6yrs

Average Tenure

Experienced Management: WJL's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Richard Shorkey
Independent Director12.8yrsUS$94.03k0.048% $75.0k
Ronald Laurie
Independent Director4.8yrsUS$88.31k0.032% $50.5k
John Gillberry
Independent Chairman0.8yrsUS$90.23k0.097% $152.5k
James Skippen
Vice Chairman of the Board0.8yrsUS$727.62k0.38% $597.0k
W. McCarten
Independent Director9.7yrsUS$143.19k0.055% $85.7k
Roxanne Anderson
Independent Director4.8yrsUS$83.22k0.083% $130.8k

4.8yrs

Average Tenure

67yo

Average Age

Experienced Board: WJL's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Quarterhill Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Quarterhill Inc.
  • Ticker: WJL
  • Exchange: DB
  • Founded: 1992
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: CA$225.753m
  • Listing Market Cap: CA$157.116m
  • Shares outstanding: 118.82m
  • Website: https://www.quarterhill.com

Number of Employees


Location

  • Quarterhill Inc.
  • 30 Duke Street West
  • Suite 604
  • Kitchener
  • Ontario
  • N2H 3W5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
QTRHTSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 1998
WJLDB (Deutsche Boerse AG)YesCommon SharesDEEURMar 1998
QTRH.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMar 1998

Biography

Quarterhill Inc. focuses on acquisition and management of technology companies that provides products and services worldwide. Its Licensing segment includes patents relating to 3D television, semiconductor manufacturing and packaging, medical stent, intelligent personal assistant, enhanced image processing, streaming video, non-volatile flash and other memory, semiconductor clocking, LED lighting, and various other technologies; automotive headlight assemblies, phased loop semiconductor licensing, microcontrollers applicable to safety-critical aerospace, computer gaming, CMOS image sensors, building automation, and smart meter monitoring; and medical, industrial, and automotive applications. The company's Intelligent Systems segment provides integrated systems and solutions, such as automated truck weigh stations; toll road systems and equipment; traffic management and safety systems; VectorSense, a tire sensor suite; Vehicle Information-In-Motion, a traffic intelligence system; integrated traffic control systems; permanent and portable slow speed weigh-in-motion systems; portable wheel load scales; traffic data collection products; vehicle and axle detection equipment; and automated vehicle identification, and other hardware and software products for the intelligent transportation systems industry. This segment serves through direct salespeople, distributors, agents, other contractors, and systems integrators. Its Enterprise Software segment provides enterprise asset management software solutions to asset intensive industries through its salesforce over the Internet. Its offerings include WorkAlign, a product suite, which consists of integrated products, such as scheduler, IIoT, mobile for EAM, maintenance budgeting, warranty tracker, and analytics; and consulting services. The company was formerly known as Wi-LAN Inc. and changed its name to Quarterhill Inc. in June 2017. Quarterhill Inc. was incorporated in 1992 and is headquartered in Kitchener, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 20:54
End of Day Share Price2020/02/17 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.