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Sohu.com (SOHU)
NASDAQ:SOHU
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Sohu
(NASDAQ:SOHU)
Rating:63Neutral
Price Target:
$16.00
▲(2.76% Upside)
Positive Factors
Earnings
Sohu reported better-than-expected net loss at US$20mn, driven by strong performance in online games.
Technology and Innovation
Management commented AI has benefited games development efficiency, enhancing productivity.
Valuation
Analyst maintains a Buy rating due to below-cash valuation and gaming sector strength.
Negative Factors
Macroeconomic Environment
Management expects the macro environment to remain soft, with 2H25 ad spend budgets likely to be cautious.
Market Performance
Marketing service revenues missed forecasts by 6.7%, indicating challenges in achieving revenue targets.
Revenue Guidance
Sohu guided marketing services revenues to decline by 20-25% year-over-year, reflecting cautious ad spend sentiment.
Sohu (SOHU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$467.82M
Dividend YieldN/A
Average Volume (3M)108.88K
Price to Earnings (P/E)3.7
Beta (1Y)0.96
Revenue Growth-8.35%
EPS GrowthN/A
CountryUS
Employees4,300
SectorCommunication Services
Sector Strength92
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)-0.68
Shares Outstanding30,065,400
10 Day Avg. Volume85,451
30 Day Avg. Volume108,879
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap-0.95
Enterprise Value/Revenue-0.74
Enterprise Value/Gross Profit-1.03
Enterprise Value/Ebitda5.13
Forecast
1Y Price Target
$18.00Price Target Upside15.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Sohu Business Overview & Revenue Model
Company DescriptionSohu.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 MoneySohu generates revenue through multiple channels, primarily through online advertising, which includes display ads, search ads, and video advertising on its various platforms. Additionally, the company earns revenue from its online gaming segment, where it develops and publishes games, both in-house and through partnerships with other developers. Sohu also generates income from subscriptions and premium services offered on its platforms. Significant partnerships with other technology firms and advertisers enhance its revenue potential, enabling Sohu to leverage its user base for targeted advertising and promotional campaigns.
Sohu Earnings Call Summary
Earnings Call Date:Aug 04, 2025
(Q2-2025)
| % Change Since: 1.10%|
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Negative
The earnings call reflects a company facing significant challenges with declining revenues in key segments, but also shows some positive developments in user engagement through successful events and improved operating profits for Changyou. However, the overall financial performance remains under pressure.Q2-2025 Updates
Positive Updates
Marketing Services Revenue Growth Quarter-over-Quarter
Marketing services revenues were $16 million, marking a 14% increase quarter-over-quarter, indicating some recovery in this segment.
Successful Events Driving User Engagement
Sohu hosted several successful events, such as the 2025 Sohu K-pop Dancing Festival and the Chinese costume model competition, which increased user engagement and brand influence.
Improvement in Operating Profit for Changyou
Changyou's quarterly operating profit increased to $51 million from $32 million in the same quarter last year, showing significant improvement.
Share Repurchase Program Progress
Sohu has repurchased 6.6 million ADS for an aggregate cost of $83 million, more than half of the total commitment, indicating strong capital management.
Negative Updates
Decrease in Total Revenue Year-over-Year
Total revenues were $126 million, down 27% year-over-year and 7% quarter-over-quarter, reflecting a challenging financial environment.
Significant Decline in Online Game Revenues
Online game revenues were $106 million, down 28% year-over-year and 10% quarter-over-quarter, indicating struggles in the gaming segment.
Continued GAAP Net Loss
GAAP net loss attributable to Sohu.com Limited was $20 million, compared to a net loss of $38 million in the second quarter of 2024 and a net income of $182 million in the first quarter of 2025.
Weak Advertising Market
Despite some recovery, the advertising market remains weak due to macroeconomic uncertainties and decreased consumer spending.
Company Guidance
In the second quarter of 2025, Sohu's guidance highlighted mixed financial performance across its business units. The company's total revenues were $126 million, reflecting a year-over-year decrease of 27% and a quarter-over-quarter decline of 7%. Marketing services revenues stood at $16 million, experiencing a year-over-year decrease of 21% but a quarter-over-quarter increase of 14%. Online game revenues were $106 million, down 28% year-over-year and 10% quarter-over-quarter. The GAAP net loss attributable to Sohu.com Limited was $20 million, an improvement from a $38 million net loss in the second quarter of 2024 but a decrease from a $182 million net income in the first quarter of 2025. Non-GAAP net loss was also $20 million, compared to a $34 million net loss a year ago and a $16 million net loss the previous quarter. Looking ahead, Sohu forecasts third-quarter marketing services revenues between $40 million and $50 million and online game revenues between $107 million and $117 million, with a projected non-GAAP and GAAP net loss ranging from $25 million to $35 million.Sohu Financial Statement Overview
Summary
Sohu faces financial challenges with declining revenues and persistent net losses impacting profitability and shareholder returns. Despite a strong equity position and low leverage, negative cash flows and returns on equity present significant hurdles for future growth.Income Statement
Sohu has faced declining revenue with a decrease from $600.7M to $598.4M in 2024, representing a slight contraction. The company struggles with profitability, as evidenced by a consistent negative net income and EBIT over recent years. The gross profit margin remains strong at 72.29% for 2024, but the net profit margin is negative at -16.76%, indicating inefficiencies and high operational costs.45
Neutral
Balance Sheet
Sohu's balance sheet shows a relatively strong equity position, with a debt-to-equity ratio of 0.04, suggesting low leverage. The equity ratio stands at 53.16%, indicating a solid equity buffer. However, the return on equity is negative at -10.87% for 2024, highlighting challenges in generating returns for shareholders.60
Neutral
Cash Flow
The cash flow statement reveals a declining trend in free cash flow, with a fall from -$43.98M in 2023 to -$67.94M in 2024. Operating cash flow also turned negative, indicating cash flow challenges. The operating cash flow to net income ratio is 0.48, reflecting issues in converting profits into cash flow.50
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 598.40M | 600.67M | 733.87M | 835.58M | 749.89M |
| Gross Profit | 432.57M | 454.92M | 542.30M | 630.90M | 532.45M |
| EBITDA | -76.97M | -37.09M | 30.43M | 133.43M | 114.72M |
| Net Income | -100.27M | -30.38M | -17.34M | 69.27M | -36.53M |
Balance Sheet | |||||
| Total Assets | 1.73B | 1.88B | 1.98B | 2.25B | 2.82B |
| Cash, Cash Equivalents and Short-Term Investments | 904.42M | 960.27M | 1.17B | 1.40B | 317.80M |
| Total Debt | 35.85M | 35.31M | 36.16M | 36.12M | 407.55M |
| Total Liabilities | 811.98M | 822.82M | 867.07M | 953.60M | 1.79B |
| Stockholders Equity | 922.34M | 1.06B | 1.11B | 1.29B | 347.37M |
Cash Flow | |||||
| Free Cash Flow | -67.94M | -43.98M | 8.40M | -104.48M | 61.43M |
| Operating Cash Flow | -48.02M | -25.57M | 32.24M | -62.28M | 95.21M |
| Investing Cash Flow | -113.36M | -291.67M | -232.79M | 516.73M | 419.77M |
| Financing Cash Flow | -40.88M | -6.56M | -82.14M | -434.10M | 93.59M |
Sohu Technical Analysis
Positive
15.57
Price Trends
13.69
Positive
12.14
Positive
12.77
Positive
Market Momentum
0.49
Positive
57.75
Neutral
72.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOHU, the sentiment is Positive. The current price of 15.57 is above the 20-day moving average (MA) of 15.37, above the 50-day MA of 13.69, and above the 200-day MA of 12.77, indicating a bullish trend. The MACD of 0.49 indicates Positive momentum. The RSI at 57.75 is Neutral, neither overbought nor oversold. The STOCH value of 72.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOHU.
Sohu Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $460.50M | 7.98 | 14.21% | ― | -4.71% | -14.88% | |
75 Outperform | $479.18M | 4.41 | 12.33% | ― | 0.77% | -8.46% | |
64 Neutral | $263.61M | 6.78 | 22.77% | -5.57% | ― | ||
63 Neutral | $467.82M | 3.73 | 12.12% | ― | -8.35% | ― | |
56 Neutral | HK$68.02B | 0.80 | -5.00% | 5.16% | -0.85% | -12.60% | |
| ― | $101.95M | 3.07 | -22.85% | ― | ― | ― | |
55 Neutral | $130.36M | ― | -12.32% | ― | -13.95% | -75.02% |
* Communication Services Sector Average
Performance Comparison
SOHU
Sohu
15.57
-0.46
-2.87%
GRVY
Gravity Co
66.16
3.16
5.02%
NCTY
The9
7.54
0.42
5.90%
DDI
Doubledown Interactive Co
9.47
-4.68
-33.07%
GDEV
Nexters
14.71
-10.37
-41.35%
MYPS
PLAYSTUDIOS
1.02
-0.58
-36.25%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.