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Stephens recommends buying QuinStreet on weakness.

Stephens analyst John Campbell reiterated an Overweight rating and $19 price target on QuinStreet, calling the morning's 29% drop in the stock overdone despite the company's "quarterly misstep." Campbell noted that QuinStreet trades at 8.7x forward calendar year EBITDA, but if the company can have its QRP platform live and fully contributing through CY20, that becomes a mere 4.9x forward EBITDA, which is "obviously a compelling valuation." He added that the company's guidance is "doable" and "potentially conservative." He concluded that a "sub-10x EBITDA multiple is a great entry point into a double-digit grower with a great market position amidst a market seeing compelling secular trends/shifts towards digital."

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Publication:The Fly
Date:Aug 9, 2019
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