Discounted Cash Flow (DCF) Analysis Levered

Quarterhill Inc. (QTRH.TO)

$1.29

-0.01 (-0.77%)

All numbers are in Millions, Currency in USD

Stock DCF: 5.34 | 1.29 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	169.40	105.42	191.66	144.53	125.69	127.71	129.76	131.84	133.95	136.10
Revenue (%)
Operating Cash Flow	87.97	-11.42	9.86	35.22	-13.34	15.32	15.57	15.82	16.07	16.33
Operating Cash Flow (%)
Capital Expenditure	-0.69	-0.96	-3.33	-2.59	-6.58	-2.58	-2.62	-2.66	-2.70	-2.75
Capital Expenditure (%)
Free Cash Flow	87.28	-12.38	6.53	32.63	-19.92	12.75	12.95	13.16	13.37	13.58

Weighted Average Cost Of Capital

Share price	$ 1.29
Beta	0.405
Diluted Shares Outstanding	114.01
Cost of Debt
Tax Rate	17.01
After-tax Cost of Debt	1.67%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.695
Total Debt	115.90
Total Equity	147.08
Total Capital	262.98
Debt Weighting	44.07
Equity Weighting	55.93
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	169.40	105.42	191.66	144.53	125.69	127.71	129.76	131.84	133.95	136.10
Operating Cash Flow	87.97	-11.42	9.86	35.22	-13.34	15.32	15.57	15.82	16.07	16.33
Capital Expenditure	-0.69	-0.96	-3.33	-2.59	-6.58	-2.58	-2.62	-2.66	-2.70	-2.75
Free Cash Flow	87.28	-12.38	6.53	32.63	-19.92	12.75	12.95	13.16	13.37	13.58
WACC
PV LFCF						10.93	10.69	10.45	10.21	9.99
SUM PV LFCF										58.66

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	3.92
Free cash flow (t + 1)	13.86
Terminal Value	721.66
Present Value of Terminal Value	595.44

Intrinsic Value

Enterprise Value	654.10
Net Debt	45.15
Equity Value	608.94
Shares Outstanding	114.01
Equity Value Per Share	5.34