After attending the recent analyst meeting, T. Michael Walkley and team at Canaccord Genuity point out NQ Mobile Inc ADR (NQ - Get Report) is well positioned in the mobile security and applications market space.
NQ Mobile's third quarter results
Recently, the leading global provider of mobile Internet services provider reported strong third quarter results for the period ended September 30, 2013. Its net revenue increased over 110% year-on-year to $54.2 million, surpassing the high-end of the company's previous guidance of $50 million to $51 million.
NQ Mobile's revenue guidance beat estimatesNQ Mobile Inc management's recent revenue guidance at the analyst day meeting surpassed Canaccord Genuity's estimates of $289 million. This translates into 60% year-on-year growth against the analyst's 2013 sales estimates. The analysts anticipate that given NQ Mobile Inc ADR (NQ - Get Report)'s increasing focus on non-subscription active user monetization, its 2014 sales mix will continue to shift toward Advertising and Enterprise as against MVAS. Canaccord Genuity's analysts point out that NQ's 2014 sales guidance assumes a mix of 45 to 50% MVAS, 20 to 25% advertising and 25 to 30% enterprise. Canaccord Genuity's analysts point out that NQ management sounded confident of findings in the special committee's independent review of recent short seller accusations.
NQ to leverage new productsThe analysts also point out that during the analyst day, NQ Mobile Inc ADR (NQ - Get Report) management highlighted an increasing focus on monetizing the company's large and growing global user base through a diverse set of new products that include core products NQ Vault, NQ Family Guardian and NQ Mobile Security. The analysts anticipate NQ Mobile Inc ADR (NQ - Get Report) will continue to grow its paying premium user totals within its under-penetrated active user base by leveraging new products including NQ Care, Music Radar, NQ Live and increasingly through gaming and both in-app and in-game advertising. Canaccord Genuity's analysts believe such a move aligns with NQ Mobile Inc ADR (NQ - Get Report)'s strategy to grow overtime into a larger mobile software company. Enthused by NQ's 2014 sales guidance above the analysts' estimates, Canaccord Genuity's analysts have increased their 2014 proforma EPS estimate from $1.43 to $1.50 and increased their price target for NQ Mobile Inc ADR (NQ - Get Report) to $29 with a Buy rating.
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