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Sohu.com (SOHU)
NASDAQ:SOHU
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Sohu
(NASDAQ:SOHU)
Rating:55Neutral
Price Target:
$11.00
▲(1.85%Upside)
Positive Factors
Advertising Revenue
Growth of Sohu's social network platform could support a larger share of advertising revenue.
Earnings
Sohu reported better-than-expected performance in online games, exceeding guidance range.
Technology and Innovation
Sohu has started to leverage various AI models in game development.
Negative Factors
Economic Environment
Management commented that the macroeconomic environment remains soft, with cautious expectations for advertising spend in the latter half of the year.
Financial Performance
Sohu's 2Q25 guidance was mixed, with online games missing pre-result estimates.
Sohu (SOHU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$324.71M
Dividend YieldN/A
Average Volume (3M)68.52K
Price to Earnings (P/E)2.9
Beta (1Y)0.81
Revenue Growth2.83%
EPS GrowthN/A
CountryUS
Employees4,300
SectorCommunication Services
Sector Strength85
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)-0.55
Shares Outstanding30,065,400
10 Day Avg. Volume72,286
30 Day Avg. Volume68,519
Financial Highlights & Ratios
PEG Ratio0.21
Price to Book (P/B)0.43
Price to Sales (P/S)0.00
P/FCF Ratio57.03
Enterprise Value/Market Cap0.76
Enterprise Value/Revenue0.10
Enterprise Value/Gross Profit0.56
Enterprise Value/Ebitda-1.02
Forecast
1Y Price Target
$17.00Price Target Upside57.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Sohu Business Overview & Revenue Model
Company DescriptionSohu.com Limited (SOHU) is a leading Chinese online media, search, and game service provider. The company's diverse range of internet-based services includes news, information, search engine services, and online gaming. Sohu operates through various sectors, with its primary focus on online advertising, search-related services through Sogou, and online gaming through its subsidiary Changyou. Sohu is headquartered in Beijing, China, and has established itself as a prominent player in China's digital landscape.
How the Company Makes MoneySohu primarily generates revenue through online advertising, which involves selling advertising space on its various platforms, including its news portals and other media properties. Advertising revenue is driven by the traffic and user engagement on its websites and mobile applications. Additionally, Sohu's search engine, Sogou, contributes to its revenue through pay-for-click and other performance-based advertising services. Another significant revenue stream for Sohu comes from its online gaming subsidiary, Changyou, which develops and operates a portfolio of online games. These games generate income through user subscriptions, in-game purchases, and virtual item sales. The company's partnerships, particularly in the gaming sector, also play a crucial role in monetizing its services and expanding its user base.
Sohu Earnings Call Summary
Earnings Call Date:May 19, 2025
(Q1-2025)
| % Change Since: -0.46%|
Next Earnings Date:Aug 11, 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's financial performance is challenged by declining revenues, persistent net losses, and negative cash flows. Despite a strong equity position and low leverage, profitability and cash flow generation remain weak, impacting overall financial health.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 598.51M | 598.40M | 600.67M | 733.87M | 835.58M | 749.89M | Gross Profit |
| 441.03M | 432.57M | 454.92M | 542.30M | 630.90M | 532.45M | EBIT |
| -117.08M | -109.40M | -87.31M | 2.78M | 97.47M | 73.37M | EBITDA |
| -86.57M | -76.97M | -37.09M | 30.43M | 133.43M | 114.72M | Net Income Common Stockholders |
| -53.88M | -100.27M | -30.38M | -17.34M | 69.27M | -36.53M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 966.61M | 904.42M | 960.27M | 1.17B | 1.40B | 317.80M | Total Assets |
| 1.83B | 1.73B | 1.88B | 1.98B | 2.25B | 2.82B | Total Debt |
| 5.27M | 35.85M | 35.31M | 36.16M | 36.12M | 407.55M | Net Debt |
| -167.50M | -124.08M | -327.19M | -661.66M | -962.83M | 190.49M | Total Liabilities |
| 838.26M | 811.98M | 822.82M | 867.07M | 953.60M | 1.79B | Stockholders Equity |
| 993.06M | 922.34M | 1.06B | 1.11B | 1.29B | 347.37M |
| Cash Flow | Free Cash Flow | ||||
| 0.00 | -67.94M | -43.98M | 8.40M | -104.48M | 61.43M | Operating Cash Flow |
| 0.00 | -48.02M | -25.57M | 32.24M | -62.28M | 95.21M | Investing Cash Flow |
| 0.00 | -113.36M | -291.67M | -232.79M | 516.73M | 419.77M | Financing Cash Flow |
| 0.00 | -40.88M | -6.56M | -82.14M | -434.10M | 93.59M |
Sohu Technical Analysis
Positive
10.80
Price Trends
10.21
Positive
11.90
Negative
12.99
Negative
Market Momentum
<0.01
Negative
57.15
Neutral
67.71
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 10.8 is above the 20-day moving average (MA) of 10.28, above the 50-day MA of 10.21, and below the 200-day MA of 12.99, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 57.15 is Neutral, neither overbought nor oversold. The STOCH value of 67.71 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $447.93M | 7.55 | 14.97% | ― | -33.83% | -38.30% | |
75 Outperform | $435.57M | 3.71 | 13.91% | ― | 10.71% | 21.74% | |
70 Neutral | $346.83M | 8.92 | 899.74% | -5.57% | ― | ||
62 Neutral | $183.81M | ― | -11.64% | ― | -11.11% | -90.96% | |
61 Neutral | $14.55B | 5.81 | -3.99% | 6.41% | 2.71% | -31.56% | |
55 Neutral | $324.71M | 2.92 | 10.08% | ― | 2.83% | ― |
* Communication Services Sector Average
Performance Comparison
SOHU
Sohu
10.80
-2.12
-16.41%
GRVY
Gravity Co
62.35
-22.58
-26.59%
DDI
Doubledown Interactive Co
8.79
-1.51
-14.66%
GDEV
Nexters
19.13
-2.39
-11.11%
MYPS
PLAYSTUDIOS
1.46
-0.72
-33.03%
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.