Qihoo Upgraded to Strong Buy - Analyst Blog
December 02 2013 - 2:00PM
Zacks
On Nov 29, Zacks Investment Research upgraded
Qihoo (QIHU) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Qihoo posted better-than-expected third-quarter fiscal 2013
results, wherein earnings of 35 cents per share surpassed the Zacks
Consensus Estimate of 26 cents.
Management cited that Qihoo’s continued focus on the Internet and
consistent product innovation have been its primary growth drivers
to date. They expect these efforts to result in a Tier 1 PC and
mobile Internet platform in China in the near future.
The company posted third-quarter revenues of $187.7 million,
representing an increase of 124% from $84.0 million in the year-ago
quarter and 24% from $151.7 million in the prior quarter. The
strong year-over-year growth in revenues was mainly due to
continued momentum in both online advertising and Internet
value-added services.
It’s true that building a position in a market dominated by a
strong player like Baidu (BIDU) will not be easy.
Baidu has grown into the go-to search service in China and the
company doesn’t look as if it is going to yield significant market
share.
However, Qihoo has made good progress in search monetization, which
is very encouraging because upcoming players generally don’t have
an offering that is compelling enough to attract a large number of
advertisers. Therefore, Qihoo’s success with monetization indicates
that its property is valuable to advertisers, which in turn is a
positive indicator of its future growth.
Other Stocks to Consider
Some other players worth considering in the technology sector
include Digital River Inc. (DRIV) and
Channeladvisor Corp (ECOM), both carrying a Zacks
Rank #1 (Strong Buy).
BAIDU INC (BIDU): Free Stock Analysis Report
DIGITAL RIVER (DRIV): Free Stock Analysis Report
CHANNELADVISOR (ECOM): Free Stock Analysis Report
QIHOO 360 TECH (QIHU): Free Stock Analysis Report
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