QuinStreet Goes Negative

QuinStreet (Nasdaq: QNST  ) reported earnings on Feb. 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), QuinStreet missed estimates on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share contracted to a loss.

Margins dropped across the board.

Revenue details
QuinStreet logged revenue of $71.8 million. The seven analysts polled by S&P Capital IQ foresaw sales of $77.2 million on the same basis. GAAP reported sales were 21% lower than the prior-year quarter's $90.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.01. The seven earnings estimates compiled by S&P Capital IQ predicted $0.01 per share. GAAP EPS were -$1.48 for Q2 against $0.09 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 14.0%, 1,040 basis points worse than the prior-year quarter. Operating margin was -2.8%, 1,220 basis points worse than the prior-year quarter. Net margin was -88.5%, 9,340 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $78.2 million. On the bottom line, the average EPS estimate is -$0.01.

Next year's average estimate for revenue is $305.8 million. The average EPS estimate is -$0.01.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 21 members out of 28 rating the stock outperform, and seven members rating it underperform. Among 11 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), eight give QuinStreet a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on QuinStreet is hold, with an average price target of $6.84.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 28, 2013, at 4:48 PM, sanders2080 wrote:

    With flat sales, margins collapsing, the current stock price at 5.73 and the P/E at 36.61, I don't see the stock price mysteriously rising to $6.84! Maybe if they replace the management team and bring in fresh ideas. Until then, this company might consider changing its name to QuinStruggle

    The marketing costs (i.e. Google) are rising, Google organic traffic is off, and gross margins have decreased from 24% to 14% year over year. Plus, they wrote off 30% of their Goodwill, due to busted acquisitions (thanks Josh!). Full disclosure: I'm shortening this stock! FS

  • Report this Comment On March 01, 2013, at 11:36 PM, CramerJohnmaster wrote:

    Dude, NASDAQ:QNST is in the S&P600 index. Why do you think the institutional ownership is so high? Being in that index means something. Too bad it seems to mean S&P made a huge mistake by picking this company to be included in the index. What I can't understand is why the QuinStreet executives have gotten no value from their acquisitions, especially in the insurance and B2B verticals. Maybe the execs need to quit blowing smoke about 20% adjusted EBITDA targets and go back to b-school to learn that when acquiring a company that if 1+1 is not 3 or more, that they better not buy the company. I think their CEO even said once, 1 + 1 = 1.5 on one of their acquisitions due to overlap. No synergy. No management leadership. No economies of scale. No technical efficiencies. I dont get it.

    Enough about the fundamentals. For all you technical analysts out there, all you need to know is this stock has only ugly chart.

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QuinStreet CAPS Rating: No stars