Analyst Coverage Change
Quarterhill Inc. (QTRH) is a Canadian technology company that operates through its subsidiaries in the intellectual property and innovation sectors. Recently, Raymond James (Rank#3), a prominent investment bank, lowered its target price for QTRH from CAD 2.45 to CAD 2, while maintaining an Outperform rating on the stock.
This downgrade came after QTRH announced its financial results for the fourth quarter of 2022. The company reported revenue of CAD 28.2 million, which represents a 9.9% decrease compared to the same period in the previous year. Additionally, the company reported a net loss of CAD 5.5 million, which is significantly higher than the net loss of CAD 1.3 million reported in the fourth quarter of 2021.
While the revenue decline can be attributed to the pandemic-induced aind inflation hit economic slowdown, the increase in net loss is a cause of concern for investors. The company attributed the higher net loss to the impairment charges related to its Wi-Fi assets and restructuring costs associated with its subsidiary, International Road Dynamics Inc. (IRD).
Despite these challenges, QTRH’s management remains optimistic about the company’s future prospects. The company’s CEO, Paul Hill, highlighted the positive impact of recent acquisitions, including the purchase of Oil and Gas Patent Innovations, LLC, which is expected to strengthen QTRH’s intellectual property portfolio in the energy sector.
The company is also focused on growing its subsidiary, IRD, which provides intelligent transportation systems and services. IRD recently secured several contracts, including a contract to provide the Saskatchewan Ministry of Highways and Infrastructure with advanced weigh-in-motion technology.
While the current financial results are not ideal, QTRH’s long-term prospects remain strong. The company has a diverse portfolio of intellectual property and innovation assets, and is focused on leveraging these assets to generate long-term growth. The recent acquisition of Oil and Gas Patent Innovations, LLC, and the growth potential of IRD, are positive developments that could drive future revenue growth.
Raymond James(Rank#3) downgrade of QTRH’s target price is a short-term setback, but investors should focus on the company’s long-term prospects. QTRH’s management is focused on driving growth through strategic acquisitions and the expansion of its subsidiaries. While there may be short-term volatility, the company’s diversified portfolio and focus on innovation make it a compelling investment opportunity for those with a long-term perspective.