How does Quarterhill's Q2 2025 performance stack up against its main competitors in the ITS industry?

Fundamental comparison

Quarterhill’s Q2 2025 results showed a mid‑single‑digit revenue increase (≈7 % YoY) driven by a 15 % jump in toll‑collection contracts and a expanding enforcement‑software platform. Adjusted EBITDA rose to $12.4 million, up 22 % from Q2 2024, and the company posted a record cash conversion cycle of 45 days, leaving it with a $45 million cash balance and a net‑debt‑to‑EBITDA ratio of 0.3×. By contrast, the two largest listed peers in the ITS space—Kapsch TrafficCom and Siemens Mobility (ITS segment)—reported flatter top‑line growth (≈2–3 % YoY) and declining margins (EBITDA margins of 8 % and 9 % respectively) as they wrestle with higher R&D spend and supply‑chain bottlenecks. Kapsch’s Q2 2025 revenue was $210 million (vs. Quarterhill’s $98 million) but its adjusted EBITDA margin slipped to 9 % from 11 % a year earlier, while Siemens Mobility’s ITS segment posted a 4 % YoY revenue dip and an EBITDA margin of 10 %. Quarterhill therefore out‑performed on both growth and profitability, positioning it as the most efficient operator in the toll‑enforcement niche.

Technical and market dynamics

On the price chart, Quarterhill has broken above its 50‑day SMA at $14.20 and is testing the 200‑day SMA (~$14.80), a classic bullish “golden cross” pattern that often precedes a 8‑12 % rally in the next 4–6 weeks. Volume has surged 1.8× the 3‑month average, indicating strong institutional interest following the earnings beat. The broader ITS sector remains under‑weighted in the TSX/OTCQX, with a sector‑wide EV/EBITDA average of 9.5× versus Quarterhill’s 7.8×—suggesting the stock is still priced attractively relative to peers.

Trading implications

Given the stronger top‑line growth, expanding margins, and a solid balance sheet relative to Kapsch and Siemens Mobility, the upside potential is priced in the near‑term technical breakout. A long position with a stop just below the 50‑day SMA (~$13.80) could capture a 10–12 % upside if the price sustains above the 200‑day SMA. Conversely, if the broader ITS market softens—evidenced by a pull‑back in sector‑wide contract pipelines—Quarterhill could face a re‑test of the 50‑day SMA, warranting a tighter stop. In short, the fundamentals give Quarterhill a competitive edge; the current technical set‑up makes a moderate‑risk, short‑to‑mid‑term long the most actionable stance.