Oppenheimer Reiterates Outperform on Perfect World

Oppenheimer reiterated its Outperform rating on Perfect World PWRD after the company posted strong Q1 results. In a research report published today, Oppenheimer states, "PWRD reported strong 1Q11 results. Revenue of $110.1M (+23% q/q, +20% y/y) was well above our/consensus estimate of $97.2/$99.4M. Growth was driven by strong performance from Zhu Xian and PW II as well as meaningful contributions from new releases: Forsaken World and Empire of the Immortals. Non-GAAP EPS of $0.84 easily beat our/consensus estimates of $0.61/$0.59. 2Q11 revenue guidance of $105-110M (flattish to slightly down sequentially) is also above consensus of $101.5M. We are raising our 2011 and 2012 revenues and earnings estimates with higher growth assumptions more than offsetting higher expense assumptions. With a solid pipeline in 2011, we expect PWRD to outperform in the next 12-18 months by delivering consistent top- and bottom-line growth." At the moment, Oppenheimer has a $30 price target on Perfect World. On Monday, Perfect World lost 0.13% of its value to close the day at $23.95. Its shares regained all of yesterday's losses in today's pre-market trading, however, rising 4.38% to $25.00.