The shut down of the online lottery provides relatively small impact to IVAS revenue as a whole as the online lottery only accounts for a small portion of the IVAS operation. There will be continued ramp up in mobile game to facilitate the transformation from PC to mobile.
Registered game users from mobile side also increased from 950,000 to 1.1 million. It is obvious that a significant effort has been put up to ramp up the mobile app store platform. Among 1,800 games in total offering, 1,600 are mobile, growing from 1,500 games from 2014Q4. Weak IVAS growth: IVAS revenue dropped more than 20% due to slowdown in web game sector and shut down of online lottery service by the Chinese governmentĬounter-argument: QIHU has been aware of the slowdown from last quarter and has been taking initiatives to ramp up its mobile game platform. Next let's examine possible reasons behind the sell off.ġ. I believe the stock sell off has been significantly overdone. Based on the valuation, QIHU is a very attractive buy.
Looking at P/E ratio, it is currently at 31 times earning and 12 times forward earning in 2016. Analysts expect the company to report revenue of $437.2 million for the second quarter.Įven with the strong earning and revenue beat, QIHU shares dropped like a stone during market time today. Looking to the second quarter, QIHU expects revenue of $435 million to $445 million, representing a 37% to 40% increase from the year-ago quarter. Revenue grew 45% year over year to $384.4 million for the quarter, above analysts' estimates of $378.12 million. Qihoo360 ( QIHU) reported earnings of 57 cents a share for the first quarter, beating analysts' estimates of 49 cents a share for the quarter.
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