QuinStreet Earnings: Here’s Why the Stock is Falling Now

QuinStreet, Inc. (NASDAQ:QNST) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 7.94%.

QuinStreet, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 22.22% to $0.14 in the quarter versus EPS of $0.18 in the year-earlier quarter.

Revenue: Decreased 11.67% to $75.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: QuinStreet, Inc. reported adjusted EPS income of $0.14 per share. By that measure, the company missed the mean analyst estimate of $0.14. It missed the average revenue estimate of $76.04 million.

Quoting Management: “This was our third consecutive quarter of an improving top line trend or smaller year over year revenue declines,” commented Doug Valenti, QuinStreet CEO. “We continue to make good progress on initiatives that we believe will return us to growth. Our business model has remained resilient and attractive, with good adjusted EBITDA and cash flow margins, and a strengthening balance sheet. In fiscal year 2013, we went from net debt of $2 million to net cash of over $35 million. For the September quarter, we expect the improving top line trend to continue and estimate revenue in the range of $74 to $79 million. Adjusted EBITDA margin is expected to be approximately 12% as we choose to more aggressively spend on media as an investment in growing our expanded auto insurance model.”

Key Stats (on next page)…

Revenue decreased 4.2% from $79.02 million in the previous quarter. EPS decreased 12.5% from $0.16 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.14 and has not changed. For the current year, the average estimate is a profit of $0.56, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)