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Quinstreet Beats Estimates Across the Board, Despite Challenging Market Conditions

By Don Francis, Editor
February 9, 2024 10:20 AM UTC
Quinstreet Beats Estimates Across the Board, Despite Challenging Market Conditions

Stephens & Co.'s John Campbell raised their price target on Quinstreet (NASDAQ: QNST) by 13.3% from $15 to $17 on February 8, 2024. The analyst maintained their Strong Buy rating on the stock. Campbell's assessment came after Quinstreet released its Q2 2024 earnings results on February 7, which were described as surpassing expectations across the board. Quinstreet's adjusted EBITDA remained optimistic despite the company's seasonally weakest quarter and a generational trough in the insurance market.

For Q2 2024, Quinstreet reported a loss per share of $0.04, beating the Zacks Consensus Estimate of $(0.05) but missing the previous year's Q2 by 100%. The company's revenue of $122.68 million exceeded the Zacks Consensus Estimate by 5.34% but fell 8% compared to Q2 2023. Quinstreet's EBITDA for Q2 2024 stood at $0.4 million, marking a 60% decline year-over-year.

Looking ahead, Quinstreet's management provided guidance for Q3 2024 and FY 2024. They anticipate Q3 revenue to range between $160 million and $170 million, with EBITDA projected to be $7 million to $9 million. For the full fiscal year, Quinstreet expects revenue growth of 5% to 15%.

CEO Doug Valenti expressed satisfaction with the December quarter's performance, highlighting positive trends in non-insurance businesses and growth initiatives. Valenti also emphasized the company's ability to achieve positive adjusted EBITDA despite challenging market conditions. Quinstreet's financial position and foundation were described as remaining strong. Valenti further noted the significant positive inflection in auto insurance client spending and anticipated substantial revenue growth in that sector.

The outlook for Quinstreet appears positive, as Campbell's Strong Buy rating aligns with the opinions of all top-rated analysts. According to WallStreetZen, 100% of these analysts currently rate QNST as a Strong Buy or Buy, with none suggesting a Hold or recommending selling the stock.

Since Quinstreet's latest quarterly report, the stock price has risen by 13.8%. On a year-over-year basis, the stock is up 0.6%. However, it is worth noting that during this period, QNST has trailed behind the S&P 500, which has experienced an impressive 21.4% increase.

John Campbell, the analyst who raised the price target on Quinstreet, is ranked in the top 25% of Wall Street analysts by WallStreetZen. With an average return of 3.6% and a win rate of 54%, Campbell specializes in the Real Estate and Financial Services sectors, among others.

QuinStreet, Inc., founded in 1999 and headquartered in Foster City, California, is an online performance marketing company. The company offers customer acquisition services to clients in the United States and internationally, primarily in the financial and home services industries. These services include qualified clicks, leads, calls, applications, and customers generated through Quinstreet's websites or third-party publishers.

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