NEW YORK (TheStreet) -- Qihoo 360 (QIHU - Get Report) was gaining 4.6% to $99.60 Monday on news of a new partnership with China Unicom's (CHU) Beijing subsidiary that lets some smartphone users download apps without charging them for data.
According to Marbridge Daily China Unicom subsidiary Beijing Unicom reachers and agreement with Qihoo that will let users download apps and games in a special "Free Data" section of Qihoo's 360 Mobile Assistant app. Users will not be charged for the mobile data used to download the apps and games in the special section.
TheStreet Ratings team rates QIHOO 360 TECHNOLGY CO -ADR as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate QIHOO 360 TECHNOLGY CO -ADR (QIHU) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- QIHU's very impressive revenue growth greatly exceeded the industry average of 16.3%. Since the same quarter one year prior, revenues leaped by 123.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- QIHOO 360 TECHNOLGY CO -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, QIHOO 360 TECHNOLGY CO -ADR increased its bottom line by earning $0.40 versus $0.12 in the prior year. This year, the market expects an improvement in earnings ($2.54 versus $0.40).
- Powered by its strong earnings growth of 209.09% and other important driving factors, this stock has surged by 205.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- QIHU's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 5.97 is very high and demonstrates very strong liquidity.
- The gross profit margin for QIHOO 360 TECHNOLGY CO -ADR is currently very high, coming in at 92.25%. Regardless of QIHU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QIHU's net profit margin of 23.65% compares favorably to the industry average.
- You can view the full analysis from the report here: QIHU Ratings Report