Sohu (SOHU) AI Stock Analysis

• Market Cap: $439.11M
• Dividend Yield: N/A
• Average Volume (3M): 55.98K
• Price to Earnings (P/E): 3.4
• Beta (1Y): 1.00
• Revenue Growth: -8.50%
• EPS Growth: N/A
• Country: US
• Employees: 4,300
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -0.68
• Shares Outstanding: 30,065,400
• 10 Day Avg. Volume: 45,272
• 30 Day Avg. Volume: 55,983
• PEG Ratio: -0.02
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.71
• P/FCF Ratio: -6.21
• Enterprise Value/Market Cap: -1.01
• Enterprise Value/Revenue: -0.81
• Enterprise Value/Gross Profit: -1.08
• Enterprise Value/Ebitda: 7.29
• 1Y Price Target: $17.50
• Price Target Upside: 22.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 51 Neutral
• Price Target: $14.50 ▲(1.68% Upside)

Sohu's overall stock score reflects significant financial challenges, including declining revenues and persistent losses. Technical indicators suggest bearish momentum, while valuation metrics indicate potential undervaluation. The earnings call provided mixed insights, with some positive developments in user engagement but ongoing revenue and profitability issues.

Positive Factors

Strong Gross Profit Margin

A strong gross profit margin indicates efficient cost management and the ability to maintain profitability in core operations, providing a buffer against revenue fluctuations.

Low Leverage

Low leverage enhances financial stability, reducing risk and interest expenses, and providing flexibility for future investments or downturns.

User Engagement Initiatives

Enhanced user engagement through targeted events can strengthen brand loyalty and expand the user base, supporting long-term revenue growth.

Negative Factors

Declining Revenue

A significant decline in revenue indicates challenges in market competitiveness and demand, impacting long-term growth prospects and financial health.

Persistent Net Losses

Ongoing net losses highlight operational inefficiencies and the inability to convert revenue into profit, posing a risk to sustainable business operations.

Negative Cash Flow Trends

Declining cash flow limits the company's ability to reinvest in growth opportunities and manage financial obligations, threatening long-term viability.

Sohu Business Overview & Revenue Model

Company Description

Sohu (SOHU) is a leading Chinese internet company that provides a diverse range of online services and products, spanning various sectors including online media, search engines, online games, and digital advertising. Founded in 1996, Sohu operates several platforms, including its flagship portal Sohu.com, which offers news, entertainment, and lifestyle content. The company also has a significant presence in the online gaming industry through its subsidiary, Sogou, which focuses on search and social media services.

How the Company Makes Money

Sohu 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 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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	549.03M	598.40M	600.67M	733.87M	835.58M	749.89M
Gross Profit	410.85M	432.57M	454.92M	542.30M	630.90M	532.45M
EBITDA	-60.62M	-76.97M	-57.06M	30.43M	133.43M	114.72M
Net Income	124.44M	-100.27M	-30.38M	-17.34M	927.73M	-86.11M
Balance Sheet
Total Assets	1.68B	1.73B	1.88B	1.98B	2.25B	2.82B
Cash, Cash Equivalents and Short-Term Investments	826.15M	904.42M	960.27M	1.17B	1.40B	317.80M
Total Debt	0.00	35.85M	35.31M	36.16M	36.12M	442.78M
Total Liabilities	614.44M	811.98M	822.82M	867.07M	953.60M	1.79B
Stockholders Equity	1.06B	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

• Technical Analysis Sentiment: Negative
• Last Price: 14.26
• 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 14.26 is below the 20-day moving average (MA) of 14.98, below the 50-day MA of 15.42, and above the 200-day MA of 13.24, indicating a neutral trend. The MACD of -0.34 indicates Positive momentum. The RSI at 36.80 is Neutral, neither overbought nor oversold. The STOCH value of 31.95 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
NTES	80 Outperform	$93.00B	20.73	24.36%	1.90%	2.86%	19.96%
DDI	75 Outperform	$436.07M	4.12	12.05%	―	0.51%	-8.46%
GDEV	72 Outperform	$403.67M	10.38	―	14.98%	―	―
BILI	68 Neutral	$11.00B	379.48	1.58%	―	22.89%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
SOHU	51 Neutral	$439.11M	3.42	12.12%	―	-8.50%	―

Sohu Corporate Events

Sohu.com Limited Announces Election of Directors and Auditor Ratification

On September 10, 2025, Sohu.com Limited held its annual general meeting of shareholders in Beijing, China. During the meeting, three nominees, Mr. Charles Huang, Dr. Dave Qi, and Mr. Shi Wang, were elected as Class II Directors, each receiving a plurality of votes. Additionally, the shareholders ratified the appointment of PricewaterhouseCoopers Zhong Tian LLP as the company’s independent auditors for the fiscal year ending December 31, 2025. These decisions are expected to strengthen the company’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.

Sohu.com Limited Announces 2025 Annual General Meeting

Sohu.com Limited announced that its 2025 Annual General Meeting of Shareholders will be held on September 10, 2025, in Beijing. The meeting will include the election of Class II Directors, Charles Huang, Dave Qi, and Shi Wang, and the ratification of PricewaterhouseCoopers Zhong Tian LLP as the company’s independent auditors for the fiscal year ending December 31, 2025. This meeting is significant for stakeholders as it involves key decisions regarding the company’s leadership and financial oversight.

Sohu Reports Q2 2025 Financial Results Amid Revenue Decline

On August 4, 2025, Sohu.com Limited announced its unaudited financial results for the second quarter ending June 30, 2025. The company reported total revenues of $126 million, marking a 27% decline year-over-year and a 7% decrease quarter-over-quarter. Despite a GAAP net loss of $20 million, the company saw improvements in marketing services revenues and maintained a strong gross margin. Sohu’s efforts in refining its media platform and optimizing its online games have helped consolidate its brand influence and capture monetization opportunities, although challenges remain with declining revenues.