- QIHU beat earnings and sales expectations and gave guidance.
- Margins are compressing and the company is facing increasing competition.
- Management has avenues to expand the business through entering the enterprise market.
- Qihoo reported Q2 earnings and revenue ahead of analyst estimates.
- Management guided Q3 revenue above views.
- The company reached 30% search market share four months ahead of schedule.
- Reiterating my bullish view on Qihoo with substantial upside potential.
- Qihoo will report 2Q14 before market opens on Monday.
- Search and mobile is expected to maintain their strong growth profile.
- MediaV a near-term pain but long-term impact is attractive. Remain bullish on the stock.
- Qihoo seems to have digested its move down in the last couple of months and might be ready to rally.
- The company has done a note offering which means that a major acquisition may be in the making.
- Comparing Qihoo’s valuation to Baidu's reveals which stock has potential for more gains in the next couple of months.
Qihoo 360: New Analyst Coverage And Why You Should Buy The Dips And Let 'Em Rip
- Thomas Chong, an analyst at Citigroup, initiated coverage of Qihoo 360 with a BUY rating and $114.10 price target.
- Why I strongly believe Chong is undervaluing Qihoo by at least 30%.
- Baidu's recent post earnings blowout, suggests other players like Qihoo will benefit greatly over the coming quarters.
Analysts Are Wrong About Qihoo 360: Strong Growth Provides Investors A Great Buying Opportunity With 65% Upside
- Analysts' price cuts do not accurately reflect and justify the future growth that is ahead of Qihoo 360.
- Learning from history: Analysts are usually late to the party and this time is no different.
- Qihoo 360 reported strong earnings on both the top and bottom lines in May and looks poised to continue doing so over the next couple of years.
- Shares of Qihoo 360 are highly undervalued and have upside of more than 65%.
Qihoo 360 Q1 Earnings Preview: Should Investors Buy, Sell, Or Hold Into Earnings?
- After beating the top and bottom lines over the past three quarters, will Qihoo 360 be able do it once again?
- Many Chinese companies have reported strong earnings. Is this a telling sign for Qihoo 360?
- Qihoo 360's past should give investors plenty of confidence heading into earnings on Tuesday.
Ride The Chinese Internet Surge With Baidu And Qihoo 360 Despite Recent Sell-Off
- Chinese Internet adoption in 2013 is about 42.3%, which is an increase from 28.9% in 2009.
- Based on current trends, the percentage of people in China using the Internet will reach 78% by 2020.
- Baidu and Qihoo 360 are the dominant Internet companies in terms of search and Internet security.
- The recent sell off of both companies (especially Qihoo) may provide a buying opportunity for a long-term play.
- Both Baidu and Qihoo have fallen since I suggested that selling Qihoo and buying Baidu might be a better way to profit in the future.
- Since Qihoo has fallen much more than Baidu, the reward/risk proposition has changed and it might be prudent to consider a long position in Qihoo and stay long Baidu.
- The growth outlook for both companies has improved in the last two months.
- Qihoo is fast establishing its dominance in the Chinese Internet market with its strong product portfolio.
- Qihoo has successfully challenged market leader Baidu for market share in the search space.
- Qihoo's monetization strategies and rapid growth rate make it an attractive investment.
Crouching Tiger: Qihoo 360 Remains In Strong Competitive Position Despite Recent Price Weakness
- 94.6% PC antivirus market share in China, over 500 million mobile security users.
- Search engine market over 25%, share continues to rise.
- Dominant mobile app distributor.
- Rapidly expanding advertising network.
Qihoo 360's Direction To Keep Its Comfortable Position Currently
- Qihoo 360 has had a significant rise in profits in the last two years and the stock is up to $112/share in March.
- Qihoo had gross revenue of $671 million (an increase of 104% from 2012) at the end of 2013.
- The company is with a new net income of $100 million at 2013, an increase of 113% from 2012.
- Qihoo needs more new products to keep improving to see future success.
- Qihoo 360 reported earnings and revenue ahead of estimates and guided Q1 2014 above consensus.
- The company’s search market share was 23% in Q4.
- After a strong run in prior months, it might be prudent to take some profits and buy Baidu.
4 Reasons Why Qihoo Could Deliver An Earnings Beat
Tue, Aug. 26, 10:54 AM
- Citing soft mobile search traffic and competition, Credit Suisse has downgraded Qihoo (QIHU -2.8%) to Neutral a day after the company sold off due to the margin concerns triggered by its Q2 report.
- On the CC (transcript), CEO Hongyi Zhou said is "making [a] strategic shift in focus on resources to mobile search," and is aiming for its mobile search share to match its PC share over the long-term.
- CFO Alex Xu stated mobile now accounts for a "low-teen to mid-teen" percentage of Qihoo's search traffic, up from ~5% at the beginning of 2014, and that the company is aiming to raise this figure to 25% by year's end.
Mon, Aug. 25, 1:11 PM
- Though Qihoo (NYSE:QIHU) beat Q2 estimates and offered above-consensus Q3 sales guidance, its gross margin fell to 79.1% from 79.5% in Q1 and 88.3% a year ago. In addition, opex rose 19% Q/Q and 114% Y/Y to $208.3M on the back of a 254% Y/Y increase in sales/marketing spend.
- Online ad revenue +22.3% Q/Q and +89% Y/Y to $171.3M thanks to search and mobile ad growth. Internet value-added service revenue +17.2% Q/Q and +140% Y/Y thanks to PC/mobile gaming growth.
- Total monthly active users of Qihoo's PC products totaled 496M in June, up from 497M in March and 461M a year ago. Smartphone users of Qihoo's 360 Mobile Safe app rose to 641M from 538M in March and 338M a year ago.
- Daily unique visitors for Qihoo's 360 browser home page grew to 128M in Q2 from 122M in Q1 and 114M a year ago. Average daily clicks for the page grew totaled 749M, up from 590M a year ago but down from 772M in Q1.
- Citi estimates PC search revenue (boosted by share gains) rose 52% Q/Q to $62M (20% of total revenue), and that mobile revenue rose 16% Q/Q to $68M, with 67% coming from games. At the same time, it expects heavy spend to result in op. margin falling to 25% in 2014 from 34% in 2013.
- Q2 results, PR
Mon, Aug. 25, 12:46 PM
Mon, Aug. 25, 9:11 AM
Sun, Aug. 24, 11:11 PM
Sun, Aug. 24, 5:30 PM
Fri, Aug. 22, 7:03 PM
- Ahead of Qihoo's (NYSE:QIHU) Q2 report (due Monday morning), CNZZ estimates Qihoo now has 30.2% of the Chinese search market in terms of page views. That's up sharply from the 16.3% it had a year ago, and suggests Qihoo may have already reached its 30% year-end target.
- Baidu's (NASDAQ:BIDU) share is pegged at 54.5%, down from 67.7% a year ago. Sohu's (NASDAQ:SOHU) Sogou unit is assigned a 12.8% share, up from 9.7% a year ago.
- Two caveats: 1) iResearch has provided higher search share figures for Baidu, and lower ones for Qihoo, than CNZZ. The firm has argued CNZZ's figures paint an incomplete picture due to a heavy reliance on small/medium-sized sites for data. 2) Qihoo's mobile search position is weaker than its PC search position. Baidu, meanwhile, just topped 500M monthly mobile search users.
Mon, Aug. 4, 10:20 AM
- The Chinese government's procurement agency has warned departments not to use antivirus software from Symantec (SYMC -0.6%) and fellow U.S. supplier Kaspersky Lab.
- Qihoo (QIHU +3.4%), which has a giant share of the Chinese antivirus software market, is rallying, though it's worth noting several other Chinese tech companies are also doing well.
- Previously, China's Public Security Ministry had warned Symantec's Data Loss Prevention software had security loopholes that could enable outside access. As in several other regions, NSA-related tensions have been running high in the Middle Kingdom. Local authorities have also launched an anti-monopoly probe against Microsoft.
- The whole of Asia-Pac accounted for 17% of Symantec's FQ4 revenue. FQ1 results arrive on Wednesday.
Wed, Jul. 30, 4:08 PM| Comment!
Fri, Jul. 25, 5:32 PM
- Goldman has raised its 2014-2016 Baidu (BIDU +10.9%) EPS estimates by 17%-23% following its sizable Q2 EPS beat and above-consensus Q3 guidance, and hiked its target by $35 to $260. BofA/Merrill, Deutsche, and Piper have also raised their Baidu PTs.
- Goldman was pleased with several datapoints provided in the Q2 report and CC (transcript). Among them: 1) Baidu topped 500M mobile search monthly active users (MAUs) in June. 2) Maps MAUs have passed 200M. 3) Baidu's app distribution platforms (led by 91 Wireless) averaged 130M downloads/day in Q2. 4) The Nuomi daily deals unit (acquired from Renren) has seen its user base double since Q4.
- BofA/Merrill observes Baidu's aggressive spending growth is now being fueled more by hiring than by marketing spend, something it expects will translate into future leverage. Marketing spend fell to 11.5% of revenue from 14.1% in Q1, while R&D grew to 14.6% from 13.6%.
- Baidu made fresh highs today, and provided a lift to rivals Qihoo (QIHU +3.7%) and Sohu (SOHU +2.2%) along the way.
Mon, Jul. 14, 5:53 PM
- With Cheetah Mobile (CMCM -4.5%) obtaining 82% of its 2013 revenue from ad sales, and 92.6% from PCs, the ongoing shift in Chinese ad spend from PC to mobile "puts it in a tough spot," writes WestEnd511 in a column now out of embargo.
- The author argues Cheetah's "subscale" position in key markets especially leaves it at a disadvantage relative Qihoo (QIHU +2.1%) and other bigger rivals. Cheetah's mobile security software has an estimated 3% Chinese market penetration vs. 62% for Qihoo's software, 27% for Tencent's, and 18% for Baidu's.
- On PCs, Cheetah's antivirus software has 25% penetration vs. 92% for Qihoo's product and 23% for Tencent's. Its PC browser share is at just 1.3%, well below Qihoo's 24.6% and Internet Explorer's 48.1%.
- The author adds Qihoo, Baidu, and Tencent's popular Android app stores give them a distribution edge. A $16 PT is set based on a sum-of-the-parts analysis.
Wed, Jun. 11, 2:39 PM
- Acquisition-hungry Alibaba (ABABA) is buying the 1/3 of top Chinese mobile browser vendor UCWeb it doesn't yet own for a mixture of cash and stock. The price hasn't been disclosed, but Alibaba claims the deal is the biggest Chinese Web merger in history, exceeding Baidu's (BIDU +0.4%) $1.9B purchase of app store provider 91 Wireless.
- UCWeb has a 50%+ share of the Chinese mobile browser market, and also has 35% of the Indian market. The company claims 500M total browser users, as well as 50M users for its Android app store, which competes against Baidu and Qihoo's (QIHU +3.8%) popular stores.
- More importantly for Baidu (and also relevant for Qihoo), UCWeb claims a 20%+ share of the Chinese mobile search market on the back of 100M active users. A mobile search JV was launched with Alibaba in April.
- Meanwhile, CNBC reports Alibaba will likely file a new F-1 early next week that includes its Q1 results. Odds are Yahoo (YHOO +0.6%), which has been reporting Alibaba's results a quarter in arrears, will move on the numbers.
- CNBC adds Alibaba is still expected to go public in the first week of August. Bloomberg previously reported Alibaba is eying an Aug. 8 IPO.
Mon, Jun. 2, 4:03 PM
- Though Qihoo's (QIHU -4.3%) Q1 EPS beat estimates, it benefited from a $28M one-time gain and was otherwise pressured by surging expenses, writes Nomura, which has cut its PT by $12 to $113.
- The firm has respectively cut its 2014 and 2015 EPS estimates by 10% and 13% to budget for higher expenses, particularly for app pre-install deals.
- Qihoo's opex rose 101% Y/Y in Q1 (still below revenue growth of 141%), and its gross margin fell 790 bps Y/Y to 79.5%.
Tue, May. 27, 6:32 PM
- Qihoo (QIHU) expects Q2 revenue of $300M-$305M, well above a $270.2M consensus.
- Q1 results trounced estimates on the back of a 120.9% Y/Y increase in ad revenue to $140M, and a 172.2% increase in value-added service (largely gaming) revenue to $124.8M.
- Improving search/mobile monetization contributed to the ad growth. Qihoo notes it's now estimated to have 25% of the Chinese search market, up from 23% in Q4; the company has been aiming for a 30% share by year's end.
- Total users of Qihoo products/services rose by 4M Q/Q and 38M Y/Y to 497M. Users of Qihoo's 360 Mobile Safe app rose another 13% Q/Q and 96% Y/Y to 538M.
- Daily unique home page visitors rose by 3M Q/Q to 122M, after slipping by 7M in Q4. Average home page daily clicks rose by 91M Q/Q to 772M.
- Gross margin fell to 79.5% from 87.4% a year ago. Opex rose 101% Y/Y to $155.2M.
- Q1 results, PR
Tue, May. 27, 6:03 PM| 2 Comments
Mon, May. 26, 5:35 PM
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