QuinStreet, Inc. (NASDAQ:QNST) Could Be Less Than A Year Away From Profitability

We feel now is a pretty good time to analyse QuinStreet, Inc.'s (NASDAQ:QNST) business as it appears the company may be on the cusp of a considerable accomplishment. QuinStreet, Inc., an online performance marketing company, provides customer acquisition services for its clients in the United States and internationally. The US$1.1b market-cap company announced a latest loss of US$31m on 30 June 2024 for its most recent financial year result. The most pressing concern for investors is QuinStreet's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for QuinStreet

According to the 6 industry analysts covering QuinStreet, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$4.7m in 2025. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 114% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving QuinStreet's growth isn’t the focus of this broad overview, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that QuinStreet has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of QuinStreet to cover in one brief article, but the key fundamentals for the company can all be found in one place – QuinStreet's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Valuation: What is QuinStreet worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether QuinStreet is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on QuinStreet’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.