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Quinstreet (QNST)
NASDAQ:QNST
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Quinstreet
(NASDAQ:QNST)
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Rating:68Neutral
Price Target:
$12.00
▲(2.30% Upside)
Action:ReiteratedDate:02/07/26
The score is driven primarily by solid financial performance (strong cash generation, low leverage, and a rebound to profitability) and a positive earnings outlook with accretive M&A and raised growth/margin expectations. These strengths are partly offset by weak technical momentum (price below key moving averages with negative MACD and bearish oscillators) despite a supportive P/E-based valuation.
Positive Factors
Strong cash generation & low leverage
QuinStreet's TTM operating cash flow (~$101M) and FCF (~$93M), with FCF about 93% of net income and very low leverage (debt-to-equity ~0.03), create durable financial flexibility to fund product investment, accretive M&A and weather cyclical shocks without immediate capital raises.
AI & data-driven acquisition platform
A long-standing AI and analytics capability (since 2008) supports repeatable lead targeting and conversion advantages. Persistent technology-driven efficiency can sustainably lower customer acquisition costs, improve yield per lead, and provide a durable competitive moat versus less data-driven players.
Accretive M&A expanding home services scale
The Homebody acquisition is positioned to be accretive (management expects $30M+ adjusted EBITDA first year) and materially expands a faster-growing home services vertical to ~$400–500M run‑rate. This builds scale in a higher-margin segment and diversifies revenue over the medium term.
Negative Factors
High revenue concentration
With ~75% of revenue from financial services, QuinStreet remains exposed to vertical-specific spending cycles, carrier or lender budget shifts, and regulatory developments. This concentration means modest adverse trends in that vertical can materially affect revenue and cash generation durability.
Thin, transitional profitability margins
Margins remain low (roughly 10% gross, ~1% EBIT and adjusted EBITDA around 7.3%), leaving earnings and returns sensitive to cost, client mix, or traffic changes. Sustainable ROE and reinvestment capacity depend on achieving and maintaining targeted margin improvement over coming quarters.
Added leverage & post-close obligations
Funding the acquisition involved a $70M revolver draw and $75M in future payments plus a new $150M credit facility with covenants. These obligations reduce near-term financial flexibility, introduce covenant risk and constrain capital allocation while integration and expected synergies are realized.
Quinstreet (QNST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$668.54M
Dividend YieldN/A
Average Volume (3M)505.42K
Price to Earnings (P/E)10.9
Beta (1Y)1.15
Revenue Growth43.12%
EPS GrowthN/A
CountryUS
Employees899
SectorCommunication Services
Sector Strength97
IndustryAdvertising Agencies
Share Statistics
EPS (TTM)0.24
Shares Outstanding56,993,940
10 Day Avg. Volume567,570
30 Day Avg. Volume505,424
Financial Highlights & Ratios
PEG Ratio-1.69
Price to Book (P/B)3.73
Price to Sales (P/S)0.83
P/FCF Ratio10.97
Enterprise Value/Market Cap0.85
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit5.13
Enterprise Value/Ebitda15.07
Forecast
1Y Price Target
$20.25Price Target Upside72.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.11
Revenue Forecast (FY)$1.27B
Quinstreet Business Overview & Revenue Model
Company DescriptionQuinStreet, Inc., an online performance marketing company, provides customer acquisition services for its clients in the United States and internationally. The company offers online marketing services, such as qualified clicks, leads, calls, applications, and customers through its websites or third-party publishers. It serves financial and home services industries. The company was incorporated in 1999 and is headquartered in Foster City, California.
How the Company Makes MoneyQuinstreet generates revenue primarily through performance-based marketing, where it earns commissions for successfully generating leads or conversions for its clients. This model includes pay-per-click (PPC) advertising, where clients pay for clicks on their ads, and pay-per-lead (PPL) arrangements, where clients compensate Quinstreet for each lead generated. Additionally, the company may engage in partnerships with advertisers and affiliate marketing programs, further diversifying its income streams. Quinstreet's ability to leverage its proprietary technology and data analytics enhances its effectiveness in targeting and converting leads, significantly contributing to its earnings.
Quinstreet Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive and growth-oriented message: record revenue, beat outlook, meaningful guidance for higher revenue and EBITDA, a strategic and accretive acquisition (Homebody) expected to add $30M+ adjusted EBITDA and expand higher-margin media footprint, and long-term margin targets supported by AI and product initiatives. Offsetting items included modest year-over-year softness in parts of the financial services vertical (auto insurance down ~2% YoY), current adjusted EBITDA margin below the 10% target (~7.3% last quarter), and added near-term financing and payment obligations from the Homebody acquisition. On balance, the positive operational results, clear guidance, and strategic M&A + AI positioning outweigh the noted risks and challenges.Q2-2026 Updates
Positive Updates
Record Revenue and Strong Q2 Results
Total revenue for fiscal Q2 was $287.8 million (second consecutive record quarter), adjusted EBITDA was $21.0 million, and adjusted net income was $14.0 million or $0.24 per share. The company exceeded its outlook for both revenue and adjusted EBITDA.
Confident Forward Guidance
Q3 revenue guidance of $330–$340 million and adjusted EBITDA guidance of $26.5–$30.5 million. Full fiscal year 2026 revenue guidance of $1.25–$1.3 billion and adjusted EBITDA guidance of $110–$115 million.
Home Services Growth and Scale Expansion
Home services revenue grew 13% year-over-year to $71 million in Q2 and is running near $300M annually on legacy basis; combined with Homebody expected to represent $400–$500 million per year. Home services has been growing at a >15% CAGR.
Homebody Acquisition — Strategic and Accretive
Closed acquisition of Homebody (early January) with $115 million closing consideration (funded $45M cash + $70M drawn on new $150M revolver) plus $75M in post-close payments over four years. Management expects Homebody to generate $30M+ adjusted EBITDA in the first 12 months and to be accretive to prior outlook.
Auto Insurance Momentum
Auto insurance showed strong demand and outperformance vs. seasonality with sequential growth of 6% quarter-over-quarter; management expects continued significant growth and margin improvement over coming quarters and years.
Disciplined Capital Position
Closed Q2 with $107 million cash and no bank debt (pre-acquisition). Management emphasized disciplined capital allocation priorities: investing in products, accretive M&A, and share repurchases.
Track Record of Successful Acquisitions
Management highlighted past M&A successes: Modernize Home Services revenue up ~150% since 2020 and Aquavita Media revenue up ~300% since 2024, underscoring expected accretion and scaling potential from Homebody.
AI Integration and Competitive Advantage
Company reports long history of AI use (since 2008), no negative traffic trends, increasing SEM/AI-based search volume (viewed as net positive), and expects AI to be additive to revenue and margins.
Non-Insurance Financial Services Strength
Non-insurance financial services (personal loans, credit cards, banking) grew 10% year-over-year, reflecting diversification within the financial services vertical.
Negative Updates
Concentration in Financial Services and Small YoY Decline
Financial services vertical represented 75% of Q2 revenue and declined 1% year-over-year to $216.8 million, leaving company exposed to shifts in that concentrated vertical.
Auto Insurance Year-Over-Year Softness vs. Prior Surge
Although sequentially strong, auto insurance was down ~2% year-over-year as this quarter lapped an unprecedented surge in carrier spending in the prior year.
Adjusted EBITDA Margin Below Target (Transitioning)
Most recent quarterly adjusted EBITDA margin was ~7.3%, short of the company’s near-term target of 10% quarterly adjusted EBITDA margin (management expects to hit 10% this fiscal year).
Acquisition Funding and Future Payment Obligations
Homebody acquisition funded with $45M cash and $70M drawn on a new $150M revolver; additional $75M of post-close payments over four years represent future obligations and increased leverage.
One-Time GAAP Tax Adjustment (Non-Cash)
A one-time $48 million GAAP tax benefit (reversal of valuation allowance) was recorded this quarter; it is non-cash and excluded from non-GAAP results, reducing comparability of GAAP performance.
Seasonality and Macro Volatility
Home services and other verticals have significant seasonality (December/March weaker; June/September stronger). Management also described the macro environment for some financial services as 'good, not great' with consumer stress and occasional client caution in certain product areas.
Company Guidance
QuinStreet guided fiscal Q3 revenue of $330–340 million and adjusted EBITDA of $26.5–30.5 million, and full fiscal 2026 revenue of $1.25–1.30 billion with adjusted EBITDA of $110–115 million; excluding the recently acquired Homebody, management still expects at least 10% full‑year revenue growth and at least 20% adjusted EBITDA growth and to achieve a quarterly adjusted EBITDA margin goal of 10% this fiscal year (up from roughly 7.3% last quarter). The Homebody deal (≈$115M at close — $45M cash, $70M revolver draw; $75M in post‑close payments over four years) is expected to be accretive, to generate $30M+ of adjusted EBITDA in the first 12 months, to expand home services from a ~ $300M run‑rate to roughly $400–500M, and sits alongside quarter‑end cash of $107M (Q2 revenue was $287.8M, Q2 adjusted EBITDA $21M, adjusted net income $14M or $0.24/sh; a one‑time non‑cash $48M tax benefit is excluded from non‑GAAP).Quinstreet Financial Statement Overview
Summary
Overall fundamentals are solid: revenue has rebounded sharply TTM with a return to positive net income, the balance sheet is conservatively positioned with very low leverage, and operating/free cash flow are strong. Offsetting this, profitability remains thin (low margins) and free cash flow is down versus the prior period, which increases sensitivity to execution.Income Statement
TTM (Trailing-Twelve-Months) shows a sharp rebound in scale and profitability, with revenue up ~48% and positive net income after sizable losses in FY2023–FY2024. Profitability has improved meaningfully versus the prior two annual periods, but margins remain thin (about ~10% gross margin and ~1% EBIT margin TTM), leaving results more sensitive to execution and cost swings. Overall: strong recovery and growth, but still a low-margin earnings profile.66
Positive
Balance Sheet
The balance sheet is conservatively positioned with very low leverage (debt-to-equity ~0.03 TTM) and a solid equity base, which lowers financial risk and provides flexibility. Return on equity has turned positive again TTM after being negative in FY2023–FY2024, but it is still moderate (~4–5%), reflecting the business’s thin margins and recently recovering profitability. Overall: financially stable with minimal debt, though returns are not yet strong.82
Very Positive
Cash Flow
Cash generation is a clear strength: TTM operating cash flow (~$101M) and free cash flow (~$93M) are strong and broadly supported by earnings (free cash flow is ~93% of net income TTM). However, free cash flow growth is negative versus the prior period (down ~16% TTM), indicating some recent volatility despite the strong absolute level. Overall: strong cash conversion and liquidity, with a near-term growth wobble to monitor.78
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.11B | 1.09B | 613.51M | 580.62M | 582.10M | 578.49M |
| Gross Profit | 110.37M | 110.87M | 46.25M | 48.52M | 53.73M | 70.53M |
| EBITDA | 37.53M | 30.54M | -5.76M | -1.42M | 11.23M | 46.83M |
| Net Income | 62.38M | 4.71M | -31.33M | -68.87M | -5.25M | 23.55M |
Balance Sheet | ||||||
| Total Assets | 493.03M | 431.11M | 368.55M | 337.15M | 419.91M | 449.51M |
| Cash, Cash Equivalents and Short-Term Investments | 106.96M | 101.08M | 50.49M | 73.68M | 96.44M | 110.32M |
| Total Debt | 6.38M | 10.20M | 10.97M | 4.58M | 3.86M | 8.54M |
| Total Liabilities | 198.59M | 187.06M | 151.72M | 107.35M | 133.91M | 154.37M |
| Stockholders Equity | 294.44M | 244.04M | 216.82M | 229.80M | 286.00M | 295.15M |
Cash Flow | ||||||
| Free Cash Flow | 92.56M | 82.91M | 6.69M | -3.17M | 21.16M | 48.65M |
| Operating Cash Flow | 101.23M | 84.98M | 12.04M | 11.84M | 28.67M | 50.62M |
| Investing Cash Flow | -13.63M | -11.44M | -22.73M | -15.13M | -9.22M | -36.46M |
| Financing Cash Flow | -38.46M | -23.00M | -12.51M | -19.46M | -33.31M | -11.31M |
Quinstreet Technical Analysis
Negative
11.73
Price Trends
13.27
Negative
13.79
Negative
14.76
Negative
Market Momentum
-0.49
Negative
45.51
Neutral
85.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QNST, the sentiment is Negative. The current price of 11.73 is above the 20-day moving average (MA) of 11.40, below the 50-day MA of 13.27, and below the 200-day MA of 14.76, indicating a neutral trend. The MACD of -0.49 indicates Negative momentum. The RSI at 45.51 is Neutral, neither overbought nor oversold. The STOCH value of 85.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for QNST.
Quinstreet Risk Analysis
Quinstreet disclosed 44 risk factors in its most recent earnings report. Quinstreet reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Quinstreet Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $668.54M | 10.91 | 4.55% | ― | 43.12% | ― | |
68 Neutral | $1.26B | 15.51 | 12.62% | 5.41% | -0.94% | 47.48% | |
67 Neutral | $964.21M | 7.11 | 13.16% | ― | 0.32% | 69.78% | |
65 Neutral | $1.25B | 64.54 | 3.80% | ― | 6.76% | 1841.46% | |
63 Neutral | $1.56B | 37.48 | 2.66% | ― | 5.70% | 97.88% | |
62 Neutral | $856.51M | 200.46 | 1.21% | 1.29% | 11.18% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
QNST
Quinstreet
11.73
-6.88
-36.97%
DLX
Deluxe
27.96
13.30
90.66%
ZD
Ziff Davis
41.48
3.31
8.67%
STGW
Stagwell
4.95
-1.28
-20.55%
CRTO
Criteo SA
18.85
-19.43
-50.76%
EEX
Emerald Expositions Events
4.33
0.39
9.90%
Quinstreet Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
QuinStreet Secures New Credit Facility and Completes HomeBuddy Acquisition
Positive
Jan 2, 2026
On January 2, 2026, QuinStreet entered into a new senior secured credit agreement with MUFG Bank that establishes a $150 million revolving credit facility maturing on January 2, 2031, secured by first-priority liens on substantially all assets of the company and certain subsidiaries. The facility, whose pricing is tied to QuinStreet’s consolidated total net leverage ratio, will be used in part to fund QuinStreet’s acquisition of Swiss-based SIREN GROUP AG, which trades as HomeBuddy, and may also support general corporate and working capital needs; the agreement imposes customary financial covenants and limitations on additional indebtedness, liens, asset sales, dividends, investments, mergers and affiliate transactions, reflecting tighter lender oversight as QuinStreet expands. Also on January 2, 2026, QuinStreet closed the previously announced acquisition of all outstanding equity of HomeBuddy under a November 30, 2025 share purchase agreement, paying $115 million in cash at closing and committing to a further $75 million in post-closing payments over four years, a structure that spreads the purchase price over time while deepening QuinStreet’s presence in the home services lead-generation market and potentially enhancing its growth profile.
The most recent analyst rating on (QNST) stock is a Hold with a $15.50 price target. To see the full list of analyst forecasts on Quinstreet stock, see the QNST Stock Forecast page.
Business Operations and StrategyM&A Transactions
QuinStreet Acquires HomeBuddy to Boost Home Services
Positive
Dec 3, 2025
On November 30, 2025, QuinStreet, Inc. entered into a definitive agreement to acquire HomeBuddy, a digital marketplace platform that connects homeowners with home services professionals. The acquisition, valued at $115 million in cash and $75 million in post-closing payments, aims to integrate HomeBuddy into QuinStreet’s Modernize Home Services business, enhancing its platform with new products and expanding its market reach. This strategic move is expected to be accretive to QuinStreet’s revenue and adjusted EBITDA, with significant growth anticipated as synergies are realized. The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2026.
The most recent analyst rating on (QNST) stock is a Buy with a $18.00 price target. To see the full list of analyst forecasts on Quinstreet stock, see the QNST Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.