"We believe SouFun has transformed from being competitively challenged (especially in e-commerce) into one of the most defensive vertical leaders due to sustained strength in marketing and listing services," Goldman Sachs said.
"We believe SouFun's top-tier city exposure and low online ad penetration suggest marketing revenue could double in the long term," Goldman added.
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TheStreet Ratings team rates SOUFUN HLDGS LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUFUN HLDGS LTD (SFUN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 16.1%. Since the same quarter one year prior, revenues rose by 47.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 86.76% and other important driving factors, this stock has surged by 190.69% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SFUN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- SOUFUN HLDGS LTD 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 two years. We feel that this trend should continue. During the past fiscal year, SOUFUN HLDGS LTD increased its bottom line by earning $0.70 versus $0.37 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.70).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 101.0% when compared to the same quarter one year prior, rising from $55.77 million to $112.09 million.
- The gross profit margin for SOUFUN HLDGS LTD is currently very high, coming in at 88.45%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 51.61% significantly outperformed against the industry average.
- You can view the full analysis from the report here: SFUN Ratings Report