AsiaInfo Holdings, Inc. (ASIA) continues to trade neat its 52-week and all-time high at $32.45 on strong Q3 earnings and rising estimates.

Company Description

AsiaInfo Holdings, Inc. provides telecom. software solutions and information technology security products in China. The company was founded in 1993 and has a market cap of $1.36 billion.

Shares of ASIA got a boost on Oct 28 when the company reported better than expected Q3 results that please the Street.

Third-Quarter Results

Revenue was up 42% from last year to $63.5 million. Earnings also came in strong at 20 cents, 2 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last four quarters by an average of 3 cents, or 17%.

AsiaInfo scored well in a couple of key categories, with gross margin improving to 54.6% from 51.8% last year, with gross profit expanding to 57% of revenue from 54.2% last year. The company’s balance sheet also strengthened, with cash and short-term investments increasing to $236 million.

Estimates Up On Good Quarter

The good quarter sent estimates higher, with the current year adding 9 cents and climbing to 79 cents. The next-year estimate is up 24 cents in the same time to $1.14, a bullish 44% growth projection.

Valuation

After the big gains of 2009, this stock does not come cheap, trading with a forward P/E of 36X, a premium to the overall market.

The Chart

Shares of ASIA have been hovering near the 52-week high from early December for most of the last 6 weeks. The long-term trend is still very bullish and should provide support on any weakness.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

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