Stephen & co Analyst John Campbell claimed Quin Street Inc QNST with a Overweight and a price target of $14.

QNST delivered a consistent FY2Q23 beat highlighted by a 7% top line beat with Outperformance in all segments.

QNST noted a “sharp increase in spending by auto insurance customers” in January.

The results contributed to an upbeat near-term outlook, with next-quarter sales guidance and full-year sales guidance significantly ahead of consensus, with the range for each period including the analyst’s street-high sales estimates.

However, QNST issued an EBITDA guidance for both periods that missed expectations. At mid-term, QNST’s FY23 implied EBITDA margin of 4.4% would equate to ~90 basis points Y/Y margin compression despite an implied revenue growth rate of ~7% Y/Y.

Barrington Research Analyst James Goss reiterated an outperformance and price target of $17.

Household services were the main driver as headwinds in auto insurance weighed on the quarter.

However, the company did provide updated guidance on the analyst’s most recent sales estimate, highlighting the beginnings of a recovery in auto insurance advertising spending that management had been hinting at for several quarters.

The company expects weaker earnings trends near-term, with EBITDA of $25 million to $30 million, suggesting heavier weighting in the fourth quarter as the company capitalizes on continued growth in airline spending and offers more options to consumers looking to compare fares can.

Financial services revenue declined slightly in the quarter as auto insurers’ customers continued to restrain spending as they adjusted to increased claims ratios.

Management has noted that auto insurance is generally insulated from recessions, as this is an area where consumers will look to save money and help carrier budgets tighten.

Rising rates are prompting consumers to explore other options, giving QuinStreet a boost. But besides returning to the search for more attractive political alternatives…