Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Qihoo 360 Technology ( QIHU) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Qihoo 360 Technology as such a stock due to the following factors:

  • QIHU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $240.0 million.
  • QIHU has traded 338,379 shares today.
  • QIHU is up 3.9% today.
  • QIHU was down 5.3% yesterday.

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More details on QIHU:

Qihoo 360 Technology Co. Ltd. provides Internet and mobile security products and services in the People's Republic of China. QIHU has a PE ratio of 77.4. Currently there are 9 analysts that rate Qihoo 360 Technology a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Qihoo 360 Technology has been 3.4 million shares per day over the past 30 days. Qihoo 360 Technology has a market cap of $8.9 billion and is part of the technology sector and computer software & services industry. Shares are down 13.9% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Qihoo 360 Technology as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, notable return on equity, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • QIHU's very impressive revenue growth greatly exceeded the industry average of 43.6%. Since the same quarter one year prior, revenues leaped by 109.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • QIHOO 360 TECHNOLGY CO -ADR has improved earnings per share by 15.4% 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, QIHOO 360 TECHNOLGY CO -ADR increased its bottom line by earning $0.76 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($2.49 versus $0.76).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market, QIHOO 360 TECHNOLGY CO -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Internet Software & Services industry average. The net income increased by 18.6% when compared to the same quarter one year prior, going from $33.00 million to $39.12 million.
  • QIHU's debt-to-equity ratio of 0.69 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. Despite the fact that QIHU's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.22 is high and demonstrates strong liquidity.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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