Sohu (SOHU) AI Stock Analysis

• Market Cap: $412.15M
• Dividend Yield: N/A
• Average Volume (3M): 38.14K
• Price to Earnings (P/E): 1.1
• Beta (1Y): 1.09
• Revenue Growth: -4.80%
• EPS Growth: N/A
• Country: US
• Employees: 4,300
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 9.77
• Shares Outstanding: 26,069,021
• 10 Day Avg. Volume: 37,935
• 30 Day Avg. Volume: 38,142
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.35
• Price to Sales (P/S): 0.75
• P/FCF Ratio: -30.54
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 0.76
• Enterprise Value/Ebitda: -5.64
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -3.04
• Revenue Forecast (FY): $575.40M

• Rating: 52 Neutral
• Price Target: $16.50 ▲(2.48% Upside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

The score is held back primarily by weak recent cash generation and pressured operating profitability, reinforced by cautious near-term guidance and continued social media losses. Offsetting factors include a strong, low-leverage balance sheet and an optically low P/E, while technicals are broadly neutral with slightly negative momentum.

Positive Factors

Conservative balance sheet

Minimal debt and a conservative balance sheet provide a durable solvency cushion. Low leverage and sizable equity absorb operating losses, preserve optionality for investments or buybacks, and reduce refinancing risk across the next several quarters.

High-margin gaming franchise

Changyou's scale and profitability are long-term strengths: steady annual revenues and substantial operating profit point to high-margin gaming economics. Consistent game monetization and content cadence can generate durable operating cash and underpin company earnings.

Share repurchase program

Active buybacks demonstrate disciplined capital allocation and shareholder return focus. With low leverage and cash resources, repurchases are a durable way to return capital, support per-share metrics, and signal management confidence in long-term cash availability.

Negative Factors

Weak cash generation

Sustained negative operating and free cash flow over multiple years indicates ongoing cash burn. This undermines the quality of reported earnings, increases reliance on cash reserves or financing, and constrains the firm's ability to self-fund content, marketing, or new investments.

Loss-making social media unit

The social media segment is a persistent structural drag: sizable operating losses relative to modest revenues show weak monetization despite content spend. Unless engagement monetization materially improves, this segment will continue to pressure consolidated profitability.

Earnings driven by one-time item; ad weakness

The large 2025 profit was materially driven by a one-time tax reversal, masking operating fragility. Combined with an 18% annual decline in marketing services and conservative near-term ad guidance, this raises risk that reported earnings gains are not sustainable.

Sohu Business Overview & Revenue Model

Company Description

Sohu.com Limited provides online media, video, and game products and services on PCs and mobile devices in China. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, and ifox, a PC video application. The company is also involved in the development, operation, and licensing of online games for PCs and mobile devices, which include massive multiplayer online role-playing games, and casual and strategy games. In addition, it operates focus.cn, which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. Further, the company provides paid subscription services, interactive broadcasting services, and sub-licensing of purchased video content to third parties. Sohu.com Limited was incorporated in 1996 and is headquartered in Beijing, China.

How the Company Makes Money

Sohu primarily generates revenue from two core sources: (1) Online advertising and marketing services and (2) Online games. 1) Online advertising and marketing services: Sohu sells brand advertising and performance-based marketing placements across its online media properties. Revenue is generally driven by advertisers purchasing ad inventory (e.g., display and other digital ad formats) on Sohu’s platforms, with pricing influenced by traffic, user engagement, advertiser demand, and broader advertising market conditions. 2) Online games: Through its Changyou operations, Sohu earns revenue from operating and monetizing online games. This typically includes receipts from in-game purchases and other game-related services tied to the game lifecycle (such as content updates and player engagement activities). Performance in this segment depends on the popularity and longevity of its game titles, user acquisition and retention, and the cadence of new content and launches. In addition, Sohu may have other income streams such as interest or investment-related income and revenue from other internet businesses; specific breakdowns beyond the major categories are null.

Sohu Financial Statement Overview

Summary

Mixed fundamentals: strong gross margins and a conservative balance sheet with minimal debt, but operating profitability is pressured (negative EBIT/EBITDA in recent years) and recent cash flows are weak (negative operating and free cash flow in 2023–2025). The 2025 profit swing appears heavily non-operating given the mismatch with cash flow.

Income Statement

Revenue has been broadly flat since 2023 (2024: slight decline; 2025: ~2% down), but gross margins remain strong (~72%–77%), indicating solid underlying unit economics. The key issue is profitability below the gross line: EBIT and EBITDA are negative in most recent years (2023–2025), suggesting persistent operating cost pressure. Net income is highly volatile—large profit in 2021 and a sharp swing to a very high profit margin in 2025—implying material non-operating or one-time impacts rather than durable operating earnings strength.

Balance Sheet

The balance sheet looks conservative: debt is minimal in recent years and drops to zero in 2025, with very low leverage in 2022–2024 as well. Equity remains sizable relative to assets, providing a cushion through operating losses. Returns on equity are inconsistent (negative in 2022–2024, then strong in 2025), reinforcing that earnings quality and sustainability are the bigger questions—not solvency or balance-sheet risk.

Cash Flow

Cash generation is a clear weak spot recently: operating cash flow is negative in 2023–2025, and free cash flow is also negative in those years, pointing to ongoing cash burn. While 2022 and 2020 showed positive operating and free cash flow, the latest trend suggests the business is not currently self-funding. The 2025 outcome is particularly concerning given the disconnect between strong reported net income and negative operating/free cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	585.88M	598.40M	600.67M	733.87M	835.58M
Gross Profit	454.04M	432.57M	454.92M	542.30M	630.90M
EBITDA	-31.44M	-76.97M	-57.06M	30.43M	175.02M
Net Income	395.14M	-100.27M	-30.38M	-17.34M	927.73M
Balance Sheet
Total Assets	1.64B	1.73B	1.88B	1.98B	2.25B
Cash, Cash Equivalents and Short-Term Investments	830.68M	904.42M	960.27M	1.17B	1.40B
Total Debt	0.00	37.51M	41.36M	36.50M	36.12M
Total Liabilities	357.98M	811.98M	822.82M	867.07M	953.60M
Stockholders Equity	1.28B	922.34M	1.06B	1.11B	1.29B
Cash Flow
Free Cash Flow	-14.46M	-67.94M	-43.98M	8.40M	-104.48M
Operating Cash Flow	-4.77M	-48.02M	-25.57M	32.24M	-62.28M
Investing Cash Flow	24.91M	-113.36M	-291.67M	-232.79M	516.73M
Financing Cash Flow	-54.22M	-40.88M	-6.56M	-82.14M	-434.10M

Sohu Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOHU, the sentiment is Negative. The current price of 16.1 is below the 20-day moving average (MA) of 16.28, below the 50-day MA of 16.41, and above the 200-day MA of 15.15, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 43.63 is Neutral, neither overbought nor oversold. The STOCH value of 46.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SOHU.

Sohu Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DDI	77 Outperform	$414.02M	4.17	11.28%	―	1.21%	0.72%
NTES	74 Outperform	$71.50B	18.20	22.14%	2.19%	5.69%	32.87%
BILI	65 Neutral	$10.37B	62.04	8.04%	―	16.84%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
GDEV	59 Neutral	$262.89M	3.94	-62.85%	18.48%	―	―
SOHU	52 Neutral	$412.15M	1.12	35.19%	―	-4.80%	―

Sohu Corporate Events

Sohu Swings to 2025 Profit on Changyou Tax Reversal Despite Flat Revenues

On February 9, 2026, Sohu reported unaudited results for the fourth quarter and full year ended December 31, 2025, highlighting the centrality of its online games franchise and a smaller, more volatile marketing services business. Total 2025 revenue dipped 2% to US$584 million as marketing services fell 18%, while online game revenue edged up 1% with group gross margin improving to 77%, underscoring the profitability of its gaming segment.

The company swung to a GAAP net profit of US$394 million for 2025 from a US$100 million loss in 2024, largely driven by a US$285 million reversal of previously accrued withholding tax related to its Changyou unit, which produced a substantial income tax benefit. Fourth-quarter revenue rose 6% year-on-year to US$142 million but declined 21% sequentially, and despite higher operating losses and a goodwill impairment, the tax reversal pushed quarterly GAAP net income to US$223 million, leaving Sohu with about US$1.2 billion in cash and investments and signaling a strengthened balance sheet and improved financial flexibility.

The most recent analyst rating on (SOHU) stock is a Hold with a $17.50 price target. To see the full list of analyst forecasts on Sohu stock, see the SOHU Stock Forecast page.