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Turned the Corner

Stock (Symbol) Stock Price

Qihoo 360 (QIHU)

$70

Data is as of Expected to Report Sector

June 24, 2015

Aug 24 – Aug 28

Technology

Sharek’s Take
David SharekQihoo’s CEO has put in a buyout offer for QIHU at $77 per share. There’s a few obstacles in this plan however. Quihoo officials own 1/3rd of the company and would need $6.7 billion for the rest, which might be hard to get, and the $70 stock price suggests this. Still, this is China’s #2 search engine with a 20% market share, but hasn’t made as much money off search as we expected. The company is also big in PC and mobile device security. The big positive inside the numbers is profit growth is expected to accelerate from 6% to 40% next qtr — and average 52% over the next 4 qtrs. Also annual profit estimates just ticked up after 2 qtrs of declines. I’m perplexed as to why the stock isn’t higher, but it has jumped from $47 to $70 since last qtr. My 2015 Fair Value is $76, but 2016’s is a robust $106. Note I haven’t been a good judge on where the stock is headed and at one point rode it down 50% from its high.
One-Year Chart
QIHU_2015_Q2Well now I think we are past the two qtrs of sub par profit growth, and maybe the stock will continue higher. Excellent Est LTG or 35% per year and the P/E is only 20. Estimates look great.
Earnings Table
QIHU_2015_Q2_EPSRevenues soared 45% last qtr but QIHU put out only 6% profit growth as it spend on increased marketing and promotions to promote its mobile search service.
 
QIHU beat the street by 9 cents after missing it by 4 cents a qtr earlier.
 
Annual Profit Estimates finally ticked higher, a big sigh of relief.

 
Quarterly estimates look excellent at this point, I hope these numbers come through and the stock continues higher.
Fair Value
QIHU_2015_Q2_PHLast qtr I said “I think when momentum turns this stock could roar higher” and now the stock has shot higher. You could say this stock is worth a 35 P/E, but since I’ve been a poor judge of where QIHU is going lets stick with 22 as fair.
Ten-Year Chart
QIHU_2015_Q2_10yrStock has been wild since its IPO. Profits have gone solidly higher each year. Scratching head.
Power Ranking Bottom Line
Growth Portfolio

13 of 23

Qihoo has had a nice bounce and at 20x earnings with 50% profit growth coming the stock could continue to march higher. Still, QIHU has been a tough one to cover as it swings wildly.
 
QIHU is ranked 13th in the 23 stock
Growth Portfolio Power Rankings. It’s too dangerous for the Aggressive Growth Portfolio.

Aggressive Growth Portfolio

N/A

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