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Sohu.com (SOHU)
NASDAQ:SOHU
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Sohu
(NASDAQ:SOHU)
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Rating:63Neutral
Price Target:
$16.00
▼(-0.62% Downside)
Sohu's overall stock score reflects significant financial challenges, including declining revenues and persistent net losses. However, the stock's technical indicators show positive momentum, and its low P/E ratio suggests it may be undervalued. The earnings call provided mixed signals, with some operational improvements but ongoing financial pressures.
Positive Factors
Strong Equity Position
A low debt-to-equity ratio indicates financial stability and flexibility, allowing Sohu to navigate economic uncertainties without significant financial strain.
Improvement in Operating Profit for Changyou
The improvement in Changyou's operating profit reflects operational efficiencies and potential for future growth in the gaming segment, enhancing overall business performance.
Successful User Engagement Initiatives
Increased user engagement through successful events strengthens Sohu's brand presence and could lead to higher future revenue from advertising and partnerships.
Negative Factors
Declining Revenue
The significant decline in revenue indicates challenges in maintaining market share and competitiveness, potentially impacting long-term growth and profitability.
Negative Cash Flow Trends
Negative cash flow trends highlight difficulties in generating sufficient cash to support operations, which could limit investment in growth initiatives and impact financial health.
Weak Advertising Market
A weak advertising market poses challenges for Sohu's primary revenue stream, potentially affecting its ability to sustain revenue growth and profitability in the long term.
Sohu (SOHU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$484.05M
Dividend YieldN/A
Average Volume (3M)65.25K
Price to Earnings (P/E)3.9
Beta (1Y)0.99
Revenue Growth-8.50%
EPS GrowthN/A
CountryUS
Employees4,300
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)-0.68
Shares Outstanding30,065,400
10 Day Avg. Volume56,502
30 Day Avg. Volume65,252
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap-0.91
Enterprise Value/Revenue-0.74
Enterprise Value/Gross Profit-1.03
Enterprise Value/Ebitda5.13
Forecast
1Y Price Target
$18.00Price Target Upside11.80% 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: |
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed performance. While there were achievements in online game revenues and user engagement through events, significant challenges remain with overall revenue decline, net losses, and weak advertising sentiment. The company is focused on building user base and brand influence amidst a tough economic environment.Q2-2025 Updates
Positive Updates
Online Game Revenue Performance
Online game revenues reached the high end of guidance, achieving $106 million despite market challenges.
User Engagement and Brand Influence
Increased user engagement and brand influence through differentiated events, especially in K-pop and Hanfu verticals, which became major attractions.
Share Repurchase Program
Sohu has repurchased 6.6 million ADS for an aggregate cost of approximately $83 million, more than half of the total commitment.
Negative Updates
Overall Revenue Decline
Total revenues were $126 million, down 27% year-over-year and 7% quarter-over-quarter.
Marketing Services Revenue Decrease
Marketing services revenues were $16 million, down 21% year-over-year, despite a 14% quarter-over-quarter increase.
Continued Net Loss
GAAP net loss attributable to Sohu.com Limited was $20 million, compared to a net loss of $38 million in the same quarter last year.
Weak Advertising Sentiment
Advertising revenue faces challenges due to macroeconomic uncertainties and reduced consumer spending.
Company Guidance
In the second quarter of 2025, Sohu reported total revenues of $126 million, reflecting a decrease of 27% year-over-year and a 7% decline quarter-over-quarter. Marketing services revenues reached $16 million, marking a 21% year-over-year decline but a 14% increase from the previous quarter. Online game revenues were $106 million, down 28% year-over-year and 10% quarter-over-quarter. The company recorded a GAAP net loss of $20 million, an improvement from a $38 million loss in the same quarter last year, but a significant drop 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 loss a year ago and a $16 million loss in the previous quarter. Looking ahead to the third quarter, Sohu anticipates marketing services revenues to range between $40 million and $50 million, while online game revenues are expected to be between $107 million and $117 million. The company forecasts both GAAP and non-GAAP net loss to be between $25 million and $35 million. CEO Dr. Charles Zhang highlighted efforts to enhance user engagement through events that align with shared interests, while CFO Joanna Lv discussed the ongoing share repurchase program, with $83 million spent on 6.6 million ADS by July 31, 2025.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 with low leverage, negative cash flows and returns on equity present significant hurdles.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 | 594.65M | 598.40M | 600.67M | 733.87M | 835.58M | 749.89M |
| Gross Profit | 428.39M | 432.57M | 454.92M | 542.30M | 630.90M | 532.45M |
| EBITDA | -86.23M | -76.97M | -37.09M | 30.43M | 133.43M | 114.72M |
| Net Income | 106.86M | -100.27M | -30.38M | -17.34M | 69.27M | -36.53M |
Balance Sheet | ||||||
| Total Assets | 1.70B | 1.73B | 1.88B | 1.98B | 2.25B | 2.82B |
| Cash, Cash Equivalents and Short-Term Investments | 875.72M | 904.42M | 960.27M | 1.17B | 1.40B | 317.80M |
| Total Debt | 0.00 | 35.85M | 35.31M | 36.16M | 36.12M | 407.55M |
| Total Liabilities | 609.31M | 811.98M | 822.82M | 867.07M | 953.60M | 1.79B |
| Stockholders Equity | 1.09B | 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
16.10
Price Trends
15.58
Positive
13.63
Positive
13.13
Positive
Market Momentum
0.05
Positive
57.24
Neutral
50.14
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 16.1 is above the 20-day moving average (MA) of 15.77, above the 50-day MA of 15.58, and above the 200-day MA of 13.13, indicating a bullish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 57.24 is Neutral, neither overbought nor oversold. The STOCH value of 50.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOHU.
Sohu Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $461.84M | 4.34 | ― | ― | 0.51% | -8.46% | |
74 Outperform | $446.26M | 7.74 | 14.96% | ― | -4.71% | -14.88% | |
72 Outperform | $471.38M | 12.13 | -25.15% | 12.73% | -5.57% | ― | |
63 Neutral | $484.05M | 3.86 | 12.12% | ― | -8.50% | ― | |
51 Neutral | $121.32M | -3.86 | -12.78% | ― | -13.95% | -75.02% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
SOHU
Sohu
16.10
0.60
3.87%
NTES
NetEase
151.36
57.25
60.83%
NCTY
The9
10.28
3.76
57.67%
BILI
Bilibili
27.33
0.60
2.24%
DDI
Doubledown Interactive Co
9.31
-6.39
-40.70%
GDEV
Nexters
28.24
0.91
3.33%
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.