UPDATE: Jefferies Raises PT on Qihoo 360 on Strong Game Growth Across Web and Mobile

In a report published on Monday, Jefferies analyst Cynthia Meng raised the price target on Qihoo 360 (NYSE: QIHU) from $31.00 to $49.00 and reiterated a Hold rating.

In the report, Jefferies noted, "Qihoo recorded its first quarter of USD6mn search revenue since the launch of its own search ads system at YE12. Given that Qihoo does not have medical/hospital advertisers, we believe its search revenue contribution will come in a more gradual pace. Web game revenue increased 113% YoY in 1Q13, driven by both ARPU and paying user growth. We expect strong game growth to continue driven by higher paying user conversion and game offering expansion. Mgmt indicated that PC will remain as the monetization priority and that mobile game will be the main catalyst for driving mobile monetization. For 2Q13, we revised up our revenue est. by 21% to USD143mn, at the midpoint of guidance and 17% above consensus. We also revised up our FY13 revenue est. by 10% to USD576mn, our net profit and EPADS est. by 9% and 7% to USD130.2mn and USD1.04, respectively."

Qihoo 360 currently trades at $43.16.