Shares of SouFun Holdings Ltd. (SFUN) reached a new 52-week high of $33.03 on Tuesday, Jul 16, 2013.
The closing price of SouFun on Jul 16 was $32.93, representing a strong one-year return of about 138.5% and a year-to-date return of about 26.7%. The S&P 500 jumped 22.1% and 14.6%, respectively during the same period. Average volume of shares traded over the last three months stands at approximately 326K.
SouFun delivered a positive average earnings surprise of 24.0% over the past four quarters. This Zacks Rank #1 (Strong Buy) stock has a market cap of $2.23 billion and a long-term expected earnings growth rate of 28.0%.
Impressive First Quarter Results, Outlook Raised
SouFun reported first-quarter earnings of 38 cents per share, which surged 137.5% from the year-ago quarter. Revenues jumped 55.6% year over year to $91.0 million.
Based on the strong results, SouFun raised fiscal 2013 revenue guidance to a range of $527.0 to $538.0 million (prior outlook $516.0 to $527.0 million), which reflects year-over-year increase in the range of 22.5% to 25.0%.
Key Growth Catalysts
SouFun is expected to benefit from the strong growth potential of the Chinese real estate market. A steady increase in the number of advertisers, higher revenues from e-commerce services and increasing number of property listings are expected to further drive top-line growth going forward.
Although increasing investments (particularly due to increasing headcount and service expansion into other cities) are expected to hurt profitability in the near term, we believe that SouFun’s expansion into cities other than tier-ones (Beijing, Shanghai) will boost market share and thereby revenues going forward.
The Zacks Consensus Estimate for fiscal 2013 increased 2.8% (7 cents) to $2.53 per share over the last 60 days. For fiscal 2014, the Zacks Consensus Estimate increased 3.8% (11 cents) to $2.99 per share over the same period.
Other Stocks to Consider
Other Internet service providers that are worth considering include Yahoo! (YHOO), Facebook (FB) and LinkedIn (LNKD). While Yahoo! carries a Zacks Rank #1 (Strong Buy), both Facebook and LinkedIn carry a Zacks Rank #2 (Buy).
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