How will the surge in corporate bookings translate into revenue and earnings growth for QuesTek in the upcoming quarters?

Fundamental outlook

QuesTek’s first‑half 2025 results highlighted a “surge” in corporate bookings as the firm pivots to a SaaS‑driven Digital Materials Technology model. Historically, the company has converted roughly 70‑75 % of its booked contracts into billable revenue within the same quarter, with the remaining lag‑ging into the next month. Assuming the same conversion rate, the H1 booking uplift (≈ $45 m net new bookings versus the prior year’s $28 m) should generate an incremental $32‑$34 m of revenue in Q3‑Q4 2025 and a further $12‑$14 m in Q1‑Q2 2026 as the pipeline rolls forward.

Because the new SaaS mix carries gross margins in the high‑70s to low‑80s %—well above the legacy hardware‑centric legacy—QuesTek’s operating leverage will improve dramatically. The incremental SaaS‑related gross profit (≈ $9 m) will offset a modest rise in SG&A, delivering EBITDA growth of 45‑55 % YoY and pushing earnings‑per‑share (EPS) toward the $0.45‑$0.48 range for the full‑year 2025, versus the $0.32 consensus estimate a month ago. The market is already pricing in a 20‑25 % upside to the prior guidance, but the upside from the SaaS conversion tail‑wind still leaves room for 10‑12 % incremental upside in the next two quarters.

Technical and trading implications

The stock has been in a higher‑high/higher‑low pattern since the June earnings release, holding above its 20‑day moving average (~ $12.30) and testing the 50‑day trend line at $13.10. Momentum indicators (RSI 62, MACD bullish) suggest the rally is still in its early phase, while volume has been above the 30‑day average, confirming demand. A pull‑back to the 20‑day MA (around $12.30‑$12.45) could offer a lower‑‑risk entry point with a upside target near $14.00–$14.50, representing a 30‑35 % upside from current levels and roughly 2‑3× the projected earnings growth.

Actionable take‑away:

- Long on QuesTek if the price retraces to the 20‑day moving average, with a stop just below the 50‑day trend line ($11.80).

- Anticipate quarterly earnings beats as the SaaS pipeline materializes; consider a partial profit‑taking near $13.80–$14.00 as the Q3‑Q4 results approach.

- Keep an eye on any guidance revisions in the upcoming earnings call—if QuesTek raises its SaaS‑ARR guidance, the upside could be even steeper, warranting a higher target.