Over the last six months, QuinStreet shares have sunk to $17.34, producing a disappointing 9.6% loss - worse than the S&P 500’s 1% drop. This may have investors wondering how to approach the situation.
Following the pullback, is this a buying opportunity for QNST? Find out in our full research report, it’s free.
Why Is QNST a Good Business?
Pioneering the concept of performance-based digital marketing since 1999, QuinStreet (NASDAQ:QNST) is a performance marketing company that connects high-intent consumers with clients in financial services and home services industries.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, QuinStreet grew its sales at an exceptional 14% compounded annual growth rate. Its growth surpassed the average business services company and shows its offerings resonate with customers. 
2. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect QuinStreet’s revenue to rise by 21%. While this projection is below its 27.1% annualized growth rate for the past two years, it is eye-popping and implies the market sees success for its products and services.
3. EPS Surges Higher Over the Last Two Years
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
QuinStreet’s EPS grew at an astounding 99.4% compounded annual growth rate over the last two years, higher than its 27.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
These are just a few reasons why we think QuinStreet is a great business. With the recent decline, the stock trades at 17.6× forward price-to-earnings (or $17.34 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
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