(KONG) KongZhong CP ADS – Steep Premium to the Overall Market

August 31st, 2009

KongZhong CP ADS (KONG) gave its share price a nice little boost on August 10 after reporting strong Q2 results that were better than expected.

Second-Quarter Results

Sales were up 37% from last year to $32.3 million. Earnings came in at 10 cents per share, 3 cents ahead of the Zacks Consensus Estimate.

During the earnings release the company noted that its gross margin expanded to 51% from 49%. KongZhong also made noted of its strong balance sheet, with $132 million.

Estimates Jump

Estimates moved higher after word of the good quarter hit the street. The current year added 7 cents and advanced to 35 cents per share. The next-year estimate is up 10 cents in the same period to 45 cents, a bullish 30% growth projection.

Valuation

With enthusiasm building, this stock does not come cheap, trading at 34X projected current-year earnings, a steep premium to the overall market.

The Chart

Shares of KONG are up huge over the last 5 months, climbing from just above $4 in early March to a recent high just short of $14. Take a look below.

Zacks Investment Research
View original at: Zacks.com News Feed

More on this topic (What's this?)
KongZhong Blows Estimates Away Again (Fusion Investing and Analysis, 8/11/09)
The Mighty KongZhong Keeps Climbing (Fusion Investing and Analysis, 7/22/09)
Only the strongest survive (and thrive) in the CP markets (Sober Look, 11/4/09)
Even Top Corporates Having Trouble Raising Short-Term Funding (naked capitalism, 9/27/08)
Read more on KongZhong, Canadian Pacific Railway at Wikinvest


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