Portfolio Update Double Edition: QNST + J
Update #1 QuinStreet (QNST) | Original recommendation February 13, 2026, at $11.25
The timing of this update is pretty juicy because just QuinStreet reported Q4 FY2026 earnings after market close on August 6, and the stock jumped 36% in the after-hours session. As of this writing on August 7, QNST is trading at approximately $20.70, up 84% from our February entry in under six months. The stock just set a new 52-week high of $20.91 intraday and we think the recent earnings beat was a pretty thorough validation of every element of the thesis we laid out in February.
For those just tuning in: QuinStreet operates digital performance marketplaces connecting high-intent consumers with clients in financial services and home services. It earns revenue on a cost-per-action basis, getting paid when its media generates qualified leads, clicks, calls, or customers.
The February entry was based around the thesis that the property-casualty insurance repricing cycle was restoring carrier profitability and reopening marketing budgets that flow disproportionately through QuinStreet's performance marketing infrastructure. In every quarter since, that projection has proven out.
What the Q4 FY2026 Earnings Report Showed
Q4 FY2026 revenue: $373.9M, +42.7% YoY beat consensus of $359.3M by 4.1% Q4 adj. EPS: $0.50, beat consensus of $0.44 by 13.6% Q1 FY2027 guidance: revenue $375M at midpoint, above Wall Street's $358.8M estimate Stock reaction: +36.2% intraday August 6-7; new 52-week high $20.91; current price ~$20.70 Entry February 13, 2026, at $11.25; current gain ~84% in under six months FY2026 full-year trajectory: Q2 $287.8M, Q3 $346.1M, Q4 $373.9M, which marked sequential record every quarter Analyst consensus: Strong Buy; five analysts; average target $19.00; high $24 (Barrington)
Why This Report Changes the Framing
Revenue of $373.9 million growing 42.7% year-over-year does not only confirm the thesis, but accelerates it. The Q1 FY2027 guidance of $375 million at the midpoint, above consensus even after the strong Q4, signals that management does not believe the Q4 acceleration is a single-quarter phenomenon. The sequential revenue trajectory is the cleanest data presentation in the story: Q2 $287.8 million, Q3 $346.1 million, Q4 $373.9 million, Q1 FY2027 guided $375 million. Four consecutive quarterly records, each building on the last, with no sign of deceleration.
In our view, a business growing at this pace in a carrier spending recovery that is still in its early innings is not a business that has pulled forward its growth, but one more likely in the middle of its cycle.
Valuation & What to Do Now
The stock is now above the $19 average analyst consensus target and we need to pause to consider how much more runway this story has left. Analyst targets are almost always backward-looking relative to earnings inflections of this magnitude, and a 36% single-day move on a 42.7% revenue beat forces a model rebuild. At $20.70 and approximately 6.5x to 7x run-rate EBITDA on a business growing revenue 42% with expanding margins and above-consensus forward guidance, we don't see valuation as necessarily stretched.
The medium-term case for 12% to 15% EBITDA margins on $1.5 billion in revenue implying $180 to $225 million in EBITDA, and a $2.7 to $4.1 billion market cap at 15x to 18x, has not changed. As a frame of reference, $2.7 billion would be more than a double from here, while $4.1 billion would be in excess of a triple. What has changed is the timeline: the pace of execution suggests we get there faster than the July base case assumed.
We would remiss if we didn't point out, once again, that the main credit for this big winner goes to Sy Jacobs. We have often called Sy a stock-picking superstar and this is more corroboration of that view. As many of you know, in late 2023, he gave us a bull story on Sprott, Inc. (SII). At one time, that was a four-bagger (i.e., it gained 400%) and it's still nearly a three-bagger. Great thanks, Sy!
Our current view on QNST: Hold the core position.
Haymakers who bought QNST and have seen it grow to an outsized share of total portfolio weight following the 84% move have a rational basis for trimming 25 to 33%. But overall, the thesis is intact, the execution is exceptional, and the Q1 FY2027 guidance suggests this is not a high-water mark.
Update #2 Jacobs Solutions (J) | Original recommendation May 15, 2026, at $128.30
We re-recommended Jacobs Solutions on May 15, 2026, at $128.30.
The stock is trading today at approximately $145, a gain of roughly 13% in under three months. However, our first highlight of this name was in April 2024 at around the same upper-$120s price.
In other words, it's been a "meh" performer.
The Q3 FY2026 earnings report on August 4 was the first major data point since our second endorsement, and it delivered a clean thesis confirmation across every metric that matters for this position. Adjusted EPS of $1.84 grew 14% year-over-year on more than 8% organic adjusted net revenue growth. Adjusted EBITDA of $367 million grew 17% with the profit margin expanding 109 basis points to 15.2%.
The headline that matters most: backlog reached a record $29 billion, up 27% year-over-year, with a trailing 12-month book-to-bill of 1.4 times on gross revenue.
Management raised full-year 2026 guidance for the third consecutive quarter, now targeting adjusted EPS of $7.20 to $7.30, implying nearly 19% year-over-year growth at the midpoint. Direct AI infrastructure now accounts for 11% of adjusted net revenue, up 100 basis points sequentially. Life sciences and advanced manufacturing (data centers and semiconductors) grew 24%, the strongest quarter the company has ever reported in that segment. Net leverage reached 1.8x, hitting the below-2.0x target one quarter ahead of schedule.
The honest assessment of Q3 is in-line rather than a clean beat, as adjusted EPS of $1.84 was approximately 1.5% below the $1.87 consensus and adjusted net revenue came in 1.4% below estimates. At $139, Jacobs trades at approximately 19x the $7.25 adjusted EPS guidance midpoint. In our view that's not expensive for a company with a $29 billion backlog growing 27%, a 1.4 book-to-bill, and direct structural exposure to AI infrastructure, semiconductor fabrication, water, nuclear, defense, and energy security spending. In fact, we think that's the exact intersection of structural tailwinds that should be a solid growth-engine for the next decade.
While we'd be a bit reluctant to chase this one after the recent rally – particularly, given our broad market concerns – we'd look to buy it on a 5% pull-back.
With the bulging backlog and the enviable position it has in a number of highly attractive business lines, once it catches its breath for a spell, it might be poised to make up for lost time.
The Haymaker Team
Note: We will publish our updated portfolio tables later this week.