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Ad Revenue Tsunami

Stock (Symbol) Stock Price

Qihoo 360 (QIHU)

$108

Data is as of Expected to Report Sector

March 24, 2014

N/A

Technology

Sharek’s Take
David SharekQihoo is setting itself up for a tsunami of ad revenue that should be hitting the company in the coming qtrs. In a little more than a year, Qihoo’s new search engine has gone from having an 8% share of the Chinese market, to 10%, 15%, 20% and now 25% (vs. Baidu’s 58% share). Even though Quihoo is getting a lot of searches, it’s not bringing in a lot of search revenue yet. When it does, this will bring in a flood of revenue and profits. Last year ad revenue rose 88%, but it should have shot up more when you consider the market share gains. We need to own a good portion of QIHU stock, for when this ad revenue tsunami hits the stock will likely soar.
One-Year Chart
QIHU_2014_Q1QIHU’s Estimated LTG of 52% is among the highest of any growth stock, but I can envision profits compounding when the tsunami hits. Profits are already soaring.
Earnings Table
QIHU_2014_Q1_EPSProfits exploded 218% last quarter as revenue jumped 115%.
 
QIHU annihilated analyst earnings estimates last quarter. The company was expected to make 43 cents and instead made 70 cents. 70 cents was a record qtr, the previous record was 47 cents.
 
Annual Profit Estimates
continue to surge higher.
 
Quarterly estimates show explosive growth continuing, but NxtQtrEst is high because QIHU has a bad qtr a year-ago.
Fair Value
QIHU_2014_Q1_PHThe enormous upside QIHU has with search engine ad revenue earns the stock a premium P/E. I feel the stock is worth 60 times earnings, the stock could go from $100 to $200 by next year.
Ten-Year Chart
QIHU_2014_Q1_10yrShares of QIHO have been soaring, as have profits. Look at how profits have jumped from $0.55 a few years ago to probably $2.48 this year.
Power Ranking Bottom Line
Growth Portfolio

5 of 26

Qihoo is a must own stock for aggressive investors, and should be a key component their portfolio. The company is achieving robust growth with its search engine, but ad revenue has yet to blossom. When it does this stock has the ability to go on a parabolic run.
 
QIHU is ranked 5th in both the 26 stock Growth Portfolio
and 12 stock Aggressive Growth Portfolio Power Rankings

Aggressive Growth Portfolio

5 of 12

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