| Stock (Symbol) | Stock Price | |
Qihoo 360 (QIHU) |
$86 |
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| Data is as of | Expected to Report | Sector |
September 10, 2013 |
Nov 15 – Nov 19 |
Technology |
| Sharek’s Take | ||
 Qihoo (QIHU) has gone from $29 to $86 since I added it to the Growth Portfolio last December. So how high can QIHU go? Let’s first estimate how much it can make. Qihooo has an internet browser and security products for China’s web users. It just came out with a search engine last year, and that search engine was expected to grab a 10% share of the Chinese market. Starting out with a 6-8% share, Qihoo’s share has ballooned to 17% this year. The company expects its share to eclipse 20% this year and 30% next year. 30% of China’s search market would being in bushels of profits. So even though QIHU is scorching hot, the stock has the potential to expand exponentially in the near future. Investors know the potential here, and will continue to put a premium P/E on the most optimistic profit projections (which are too low anyway). |
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| One-Year Chart | ||
 This stock is really extended, and dangerous to buy here. The P/E of 66 is in black because that’s where it should be. The best stocks deserve P/Es in the 60s. I love the estimates Long Term Growth Rate of 51% per year, but when I look at Estimates, this company is probably doubling profits in this rapid-growth era. |
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| Earnings Table | ||
 The company posted profit growth of 141% last quarter, the first quarter of exceptional growth since last year. Revenue more than doubled, rising 108%. The company is opening ad agencies in China, and momentum is accelerating. QIHU crushed analysts views of a 26 cent profit by making 41 cents last quarter. Boom! Big boost from search advertising.Annual Profit Estimates jumped after the beat. Focus on 2015. With the way this number is trending, $5 in profits by 2015 is achievable. Quarterly growth looks amazing. Big increases too. The 4QtrsOutEst needs time to cook. |
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| Fair Value | ||
 From $0.55 last year to probably $1.50 this year. That’s profit growth. With a 60 P/E on next year’s estimate of $2.11, this stock has a 2014 Fair Value of $127. But the stock is acting stronger than that, like “$127? Yeah right.” Going back to the $5 2015 guesstimate, a 40 P/E on that $5 is $200. 2015 is two years away, a move to $200 would be a 133% gain from here. |
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| Ten-Year Chart | ||
 This stock is on fire, too hot to get into here. But QIHU probably won’t correct because (1) the stock market just went into a rally, and (2) Quihoo has been beating almost every market share/profit forecast. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
4 of 24 |
When we question How High Can it Go we have to guess How Much Can it Make. My guesstimate is $5 by ’15. A 40 P/E would take this stock to $200. A 60 P/E? $300. If you hold QIHU now, don’t sell. If you don’t own it, pray for a correction, as this thing is extended and dangerous to buy here. |
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Aggressive Growth Portfolio
N/A |
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