Sohu’s Strong Q1 2025 Performance and Strategic AI Use Underpin Buy Rating

In a report released today, Alicia Yap from Citi maintained a Buy rating on Sohu (SOHU – Research Report), with a price target of $17.00.

Alicia Yap’s rating is based on Sohu’s strong performance in the first quarter of 2025, where the company exceeded expectations, particularly in its online gaming segment. The gaming revenue surpassed guidance, contributing to a better-than-expected net loss, which was significantly lower than forecasted. Despite a mixed outlook for the second quarter, with marketing services in line but gaming revenue below estimates, the company’s strategic use of AI in game development and other areas is seen as a positive factor.
Sohu’s valuation remains attractive, as it is below cash value, and there is support from stock repurchase programs. Additionally, the company’s marketing services, particularly in the auto and IT sectors, are performing well, providing a stable revenue stream. These factors, combined with the potential for growth in their social network platform, underpin the Buy rating given by Alicia Yap.

Yap covers the Consumer Cyclical sector, focusing on stocks such as JD, Alibaba, and PDD Holdings. According to TipRanks, Yap has an average return of 3.1% and a 43.40% success rate on recommended stocks.