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Sohu.com (SOHU)
NASDAQ:SOHU
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Sohu
(NASDAQ:SOHU)
Rating:59Neutral
Price Target:
$16.00
▲(1.52%Upside)
Positive Factors
Advertising Revenue
The growth of Sohu's social network platform could lead to a larger share of advertising revenue.
Earnings
Sohu reported better-than-expected results due to the strong performance in online games, surpassing the guidance range.
Technological Innovation
Sohu is leveraging various AI models for game development, which can enhance their product offerings.
Negative Factors
Future Guidance
Sohu's guidance for the second quarter was mixed, with online games missing the pre-result estimates.
Macroeconomic Conditions
Management indicated that macroeconomic conditions remain soft, and advertising spend budgets are expected to stay cautious.
Sohu (SOHU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$465.71M
Dividend YieldN/A
Average Volume (3M)121.08K
Price to Earnings (P/E)4.3
Beta (1Y)0.93
Revenue Growth2.83%
EPS GrowthN/A
CountryUS
Employees4,300
SectorCommunication Services
Sector Strength76
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)-0.55
Shares Outstanding30,065,400
10 Day Avg. Volume110,261
30 Day Avg. Volume121,078
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.40
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.67
Enterprise Value/Revenue0.13
Enterprise Value/Gross Profit0.73
Enterprise Value/Ebitda-0.90
Forecast
1Y Price Target
$17.00Price Target Upside7.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
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 Inc. generates revenue through multiple streams including online advertising, subscription services, and online gaming. A significant portion of the company's revenue comes from selling advertising space on its media platforms, where businesses pay to reach Sohu's large user base. The company also monetizes its video content through subscription-based services and premium video-on-demand offerings. Additionally, Sohu's subsidiary, Changyou, contributes to its earnings by developing and operating online games, which include both free-to-play and pay-to-play models, with revenue generated from in-game purchases and subscription fees. Strategic partnerships and collaborations with other tech and media companies further enhance Sohu's market reach and revenue potential.
Sohu Earnings Call Summary
Earnings Call Date:May 19, 2025
(Q1-2025)
| % Change Since: 45.25%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. While there was significant growth in the online games segment and a substantial tax reversal benefit, the decline in marketing services revenue and overall revenue raise concerns. Future projections indicate potential challenges, particularly in the gaming sector.Q1-2025 Updates
Positive Updates
Online Game Revenue Exceeds Expectations
Online game revenues reached $117 million, flat year-over-year and up 7% quarter-over-quarter, surpassing prior guidance due to high-quality content updates and improved player engagement.
Reversal of Tax Expenses
A tax expense previously recognized as an uncertain tax position was reversed this quarter, resulting in a $199 million benefit, contributing significantly to the GAAP net income of $182 million.
Social Network Platform Development
Sohu Media platform focused on enhancing social features, successfully engaging more users and broadcasters, and generating high-quality content through events like the Sohu Video influencers convention and the Sohu News Marathon.
Negative Updates
Decline in Marketing Services Revenue
Marketing services revenues were $14 million, marking a 15% decrease year-over-year and a 27% decrease quarter-over-quarter, with luxury goods and alcohol sectors contributing to the downturn.
Overall Revenue Decline
Total revenues were $136 million, representing a 3% year-over-year decrease despite a 1% quarter-over-quarter increase.
Expected Decrease in Online Game Revenues
For the next quarter, online game revenues are expected to decline by 28% to 35% year-over-year and 10% to 18% quarter-over-quarter, reflecting ongoing market challenges.
Company Guidance
In the first quarter of 2025, Sohu's financial performance showed mixed results with total revenues reaching $136 million, reflecting a 3% decrease year-over-year but a slight 1% increase quarter-over-quarter. Marketing services revenues were reported at $14 million, marking a 15% decline year-over-year and a sharper 27% drop quarter-over-quarter. However, online game revenues performed well, totaling $117 million, remaining flat year-over-year but increasing by 7% quarter-over-quarter. The company reported a GAAP net income of $182 million, a significant improvement compared to the net loss of $25 million in the first quarter of 2024 and $21 million in the fourth quarter of 2024, largely due to the reversal of a $199 million tax expense previously recognized as an uncertain tax position. Excluding this reversal, the non-GAAP net loss attributable to Sohu.com Limited was $16 million, compared to a net loss of $22 million in the same quarter the previous year and a net loss of $15 million in the previous quarter. For the second quarter of 2025, Sohu projected marketing services revenues to range between $60 million and $70 million, indicating an annual decrease of 14% to 19% but a sequential increase of 17% to 24%. Online game revenues were expected to be between $96 million and $106 million, implying an annual decline of 28% to 35% and a sequential decrease of 10% to 18%.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
15.76
Price Trends
12.15
Positive
11.92
Positive
12.73
Positive
Market Momentum
0.96
Negative
81.57
Negative
94.44
Negative
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 15.76 is above the 20-day moving average (MA) of 14.29, above the 50-day MA of 12.15, and above the 200-day MA of 12.73, indicating a bullish trend. The MACD of 0.96 indicates Negative momentum. The RSI at 81.57 is Negative, neither overbought nor oversold. The STOCH value of 94.44 is Negative, 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 (55)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $441.88M | 7.59 | 14.97% | ― | -33.83% | -38.30% | |
75 Outperform | $480.67M | 4.11 | 13.91% | ― | 10.71% | 21.74% | |
63 Neutral | $273.58M | 7.04 | 21.92% | -5.57% | ― | ||
59 Neutral | $465.71M | 4.25 | 10.08% | ― | 2.83% | ― | |
55 Neutral | AU$3.53B | 17.38 | -1.37% | 3.12% | 4.07% | -17.03% | |
| ― | $121.64M | 3.07 | -22.85% | ― | ― | ― | |
56 Neutral | $157.37M | ― | -11.64% | ― | -11.11% | -90.96% |
* Communication Services Sector Average
Performance Comparison
SOHU
Sohu
15.76
0.72
4.79%
GRVY
Gravity Co
62.69
-15.80
-20.13%
NCTY
The9
9.13
1.92
26.63%
DDI
Doubledown Interactive Co
9.74
-1.80
-15.60%
GDEV
Nexters
15.10
-5.76
-27.61%
MYPS
PLAYSTUDIOS
1.22
-0.85
-41.06%
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.