Valassis Communications (VCI) versus QuinStreet (QNST) Critical Review

Valassis Communications (NYSE: VCI) and QuinStreet (NASDAQ:QNST) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Valassis Communications and QuinStreet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valassis Communications N/A N/A N/A
QuinStreet -2.29% 1.06% 0.73%

Valuation & Earnings

This table compares Valassis Communications and QuinStreet’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Valassis Communications N/A N/A N/A $2.78 N/A
QuinStreet $299.79 million 1.34 -$12.20 million ($0.16) -54.75

Valassis Communications has higher earnings, but lower revenue than QuinStreet. QuinStreet is trading at a lower price-to-earnings ratio than Valassis Communications, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

63.7% of QuinStreet shares are held by institutional investors. 24.1% of QuinStreet shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Valassis Communications and QuinStreet, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valassis Communications 0 0 0 0 N/A
QuinStreet 0 0 1 0 3.00

QuinStreet has a consensus price target of $12.50, suggesting a potential upside of 42.69%.

Summary

QuinStreet beats Valassis Communications on 6 of the 8 factors compared between the two stocks.

Valassis Communications Company Profile

Valassis Communications, Inc. (Valassis) is a media delivery, providing over 15,000 advertisers and media solutions to influence consumers wherever they plan, shop, buy and share. The Company’s business segments include Shared Mail, Neighborhood Targeted and Free-standing Inserts. Shared Mail offers the only national shared mail distribution network in the industry with products that have the ability to reach nine out of 10 United States households through shared mail distribution. In February 2014, Harland Clarke Holdings Corp completed the acquisition of Valassis Communications, Inc.

QuinStreet Company Profile

QuinStreet, Inc. is an online performance marketing company. The Company provides vertically oriented customer acquisition programs for its clients. The Company operating segments include Direct Marketing Services (DMS) business. Its DMS business derives its net revenue from fees earned through the delivery of qualified leads, clicks, calls or customers, and display advertisements, or impressions. Client verticals within its DMS business are education and financial services. The Company’s primary client verticals are the education and financial services industries. It has presence in the business-to-business technology, home services and medical industries. The Company delivers marketing results to its clients in the form of a qualified lead or inquiry, in the form of a qualified click, or call.

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