David Hay — Portfolio Update: Sy-zing Up Another Super-Investor Winner

The setup — reassessing a 57% winner

• QNST was recommended Feb 13, 2026 at $11.25 and trades ~$17.31 today — "a pretty phenomenal return over a short period of time," so Haymaker revisits it "to assess the risk/reward going forward against the current fundamentals."
• The business: digital performance marketplaces earning on a cost-per-action basis (paid when its media generates qualified leads/clicks/calls/customers) for financial- and home-services clients — auto/home insurance, mortgages, personal loans, and increasingly home improvement (HomeBuddy, closed Jan 2026).

Why the original thesis was right — a cyclical trough mispriced as structural decline

• 2022–23 P&C carriers slashed marketing spend as they repriced their books; that "nuked QNST's revenue," which fell from ~$500M in FY23 to trough levels, leaving the stock at $11.25 (<0.7× trailing revenue) despite a structurally advantaged position.
• By late 2025 the carrier repricing cycle was accelerating — combined ratios improving, underwriting profitability restored, marketing budgets reopening — "and QNST is where those reopened budgets flow first" (performance marketing is the most measurable, accountable acquisition channel). "A cyclical trough in an operationally intact business was being priced as a structural decline."

Where the thesis stands at $17.31 — still modest on revenue

• At ~1.0× trailing revenue (~$1.18B TTM, up from 0.7× at entry) on a business growing 28–34% with improving EBITDA margins. Q4 guide midpoint $360M → FY26 revenue nearing $1.27B; management guides strong double-digit FY27 growth → >$1.5B within 18 months, "just 0.82× forward revenue."
• Analyst consensus target $19 (~8% upside) "was built on estimates that the Q4 guidance has likely made too conservative."

The incremental thesis — value the margin story on EBITDA, not revenue

• "The most relevant valuation framework at this stage is EBITDA multiple rather than revenue multiple, because the margin growth story is the incremental thesis at current prices." Q3 EBITDA margin 8.6%; Q4 guide of $40M on $360M implies 11.1% — "meaningful sequential expansion in a single quarter."
• At a normalized 12–15% EBITDA margin on $1.5B revenue → ~$180–225M EBITDA; at 15–18× (performance-marketing/digital-media peer range) → $2.7–4.1B implied market cap vs ~$1.0B today — "the medium-term value-creation opportunity if the margin trajectory continues."

The source — Sy Jacobs, and his other insurance-marketplace winners

• The idea "came our way via Sy Jacobs" — a "Super Investor" whose long list of winners justifies the label. He was also bullish on QNST's peers EverQuote (EVER, +59.7%) and MediaAlpha (MAX, +37.8%) since his March 3rd webinar (as of July 17). EVER "is on the verge of a five-year breakout."
• The unifying bull point: all three generate abundant free cash flow, funding substantial and accelerating buybacks. "It's like those old E.F. Hutton commercials: when Sy talks you really should listen." Aside: GOLD (Gold.com) — another Sy name — "has pulled back lately… which might be a great entry, or dollar-cost-averaging, point."

What to watch (and the one flag)

• Aug 6 Q4 FY26 earnings the next major catalyst. Guidance of $350–370M sits atop two record quarters, with management citing AI deployment driving productivity; consensus $0.43 EPS vs Q3's $0.31 = +39% sequential. A midpoint-or-better print with FY27 double-digit guidance likely lifts consensus targets "and the stock follows."
• The flag: CFO Gregory Wong sold 22,057 shares in June. A single insider sale "is not a thesis-breaker" (planned liquidity/tax/comp reasons), but "worth noting" on a position +57% from entry and near a 52-week high. "Does not change our view."

The bottom line — holding the full position

• "We are holding it, because the business that justified buying at $11.25 is performing better than our February thesis projected." Revenue growing faster than guided, margins expanding ahead of expectations, ~0.8× forward revenue on 28–34% growth "not at all stretched."
• Trim triggers to watch: evidence carrier spending is pulling back, HomeBuddy integration distracting from the core insurance business, or a Q4 miss suggesting the guidance was over-confident — "we do not see any of those signals." Holding the full position; revisit sizing after Aug 6. For the cautious, "no objection to cutting back a bit at this price."

Coal update — the "anti-QuinStreet," and why to add now

• The two recent coal recs "have gone down, at least on average": Yancoal (YACAF) tumbled 23%; New Hope (NHPEF), after a bounce, is "essentially a push" — the pair off ~11.5%. The weakness is blamed on "misguided optimism about the re-opening of the Strait of Hormuz," which led the market to expect softer thermal-coal demand (coal "often competes directly with LNG").
• Haymaker's counter: with LNG "once again trapped in the Persian Gulf," the need for alternatives like coal "is becoming increasingly apparent," and news out of Indonesia (the world's leading thermal-coal exporter) is "extremely bullish." Full story Friday, but "time is of the essence" in adding to YACAF (bought higher) or initiating NHPEF (passed the first time); "more aggressive investors might consider owning both."

Table housekeeping — the timely IBM sell, an XOM fix, an EWY cost update

• Haymaker highlights its "very timely IBM sell recommendation, well before it cratered due to a very negative market reaction to its second-quarter earnings" (+49.37% realized).
• Two corrections: the XOM Gain% cell "had an inaccurate figure in last week's edition… and [we] have made the correction," and the EWY cost was "updated to reflect an earlier recommendation." (EWY +166.87% and GS +133.86% round out the closed Sells-table winners.)