Bitauto (NYSE:BITA) keeps putting the pedal to the metal after posting strong financial results two weeks ago. Shares of online provider of content and marketing services for the automotive industry in China moved 12.6% higher last week. There was no material news breaking during the week. The gain was the handiwork of the strong quarterly report that pushed the shares 12.7% higher a week earlier. The gains add up. Bitauto stock has soared nearly 27% higher over the past two weeks. The shares are now at their highest level since last November.

Bitauto's fourth quarter was one of heady top-line growth. Revenue climbed 32% to $251.9 million, as growth in its transaction services helped prop up weaker but still positive growth in its digital marketing solutions and advertising and subscription segments. Analysts were only holding out for 24% in revenue growth. 

Things weren't as upbeat on the bottom line. Bitauto's quarterly profit of $0.03 a share on an adjusted basis was less than half of the net income that analysts were targeting. Wall Street pros have had a tendency of overestimating Bitauto's earnings potential, as they were forecasting larger adjusted profits than Bitauto generated in each and every quarter through 2016. 

Car on display at a showroom with a model.

Image source: Bitauto.   

Putting the "show" in showroom

Investor enthusiasm in Bitauto may seem misplaced given the mixed quarterly showing, but the stock was also trading near its 52-week low at the time of the report. Another quarter of healthy double-digit top-line growth validates Bitauto's role in its niche. It also justifies the push into playing a bigger part in generating actual leads for the automotive industry, as it helped generate 190,000 transaction in China during the fourth quarter. 

Retail investors are also simply following the lead of Chinese search engine leader Baidu (NASDAQ:BIDU), internet messaging giant Tencent (OTC:TCEHY), and online retailer (NASDAQ:JD). The three dot-com darlings invested $50 million each in Bitauto during a capital infusion nine months ago. Baidu bought into Bitauto for the first time, but Tencent and added to earlier positions. Baidu, Tencent, and owned 3.2%, 7.1%, and 23.5% of Bitauto, respectively, after the June infusion.

Having Baidu, Tencent, and as significant stakeholders can open a few doors for Bitauto, and there's no denying that having a couple of cash-rich dot-com superstars with vested interests in your success can trigger buyout speculation. Bitauto will need to start living up to Wall Street expectations on the top and bottom line if the stock is to continue moving higher organically. Bitauto is on an ugly streak of posting eight straight quarters of operating losses. With China's auto market still early in the penetration process, Bitauto is in the right place at the right time. Now it needs to show that it can translate that plum role into margin-widening bottom-line results.   

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.