We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sohu.com (SOHU) Down 7.1% Since Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Sohu.com Inc. (SOHU - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Sohu.com's Q4 Loss Widens, Revenues Fall Y/Y
Sohu.com reported fourth-quarter 2016 non GAAP loss of $1.79 per share, compared with loss of $1.68 reported in the prior-year quarter.
Sohu’s revenues of $412 million decreased 12% on a year-over-year basis due to lower revenues from advertising and online gaming.
Quarterly Details
Total online advertising revenues (inclusive of revenues from brand advertising, search and search related businesses) fell 14% to $251 million.
Brand advertising revenues in the reported quarter fell 30% to $99 million on a year-over-year basis while search and search-related revenues increased 1% to $153 million.
Online game revenues for the quarter plunged 25% year over year to $95 million.
Sogou’s revenues grew 4% to $172 million.
Margins
Non-GAAP gross margin in the quarter decreased to 44% from 57% in the year-ago quarter. Non-GAAP gross margin of the company’s online advertising business was 33%, down from 47% in the prior-year quarter.
Brand advertising business margin was 9%, a sharp drop from 38% reported in the year-ago quarter but marked an increase of 1% from the third quarter. Non-GAAP gross margin for the search and search-related business in the quarter was 48%, down from 55% in the year-ago quarter.
Non-GAAP gross margin of the company’s online game business remained flat year over year at 78%.
Sohu’s non GAAP net loss was $69 million as against profit of $$65 million reported in the year-ago quarter.
Balance Sheet
Sohu exited the quarter with cash and cash equivalents (and short-term investments) of $1.30 billion, compared with $1.42 million as of Dec 31, 2015.
Outlook
For the first quarter of 2017, Sohu expects revenues in a range of $345 million–$375 million.
Management estimates brand advertising revenues in a range of $75 million to $85 million, representing 32% to 40% year-over-year decline.
Sogou revenues are expected to be in a range of $145 million to $155 million. Online game revenues are expected in a band of $80 million–$90 million, indicating a year-over-year decline of 12% to 22%.
The company expects non-GAAP loss per share to be between $1.55 and $1.80.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 915.6% due to these changes.
At this time, Sohu.com's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Sohu.com (SOHU) Down 7.1% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Sohu.com Inc. (SOHU - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Sohu.com's Q4 Loss Widens, Revenues Fall Y/Y
Sohu.com reported fourth-quarter 2016 non GAAP loss of $1.79 per share, compared with loss of $1.68 reported in the prior-year quarter.
Sohu’s revenues of $412 million decreased 12% on a year-over-year basis due to lower revenues from advertising and online gaming.
Quarterly Details
Total online advertising revenues (inclusive of revenues from brand advertising, search and search related businesses) fell 14% to $251 million.
Brand advertising revenues in the reported quarter fell 30% to $99 million on a year-over-year basis while search and search-related revenues increased 1% to $153 million.
Online game revenues for the quarter plunged 25% year over year to $95 million.
Sogou’s revenues grew 4% to $172 million.
Margins
Non-GAAP gross margin in the quarter decreased to 44% from 57% in the year-ago quarter. Non-GAAP gross margin of the company’s online advertising business was 33%, down from 47% in the prior-year quarter.
Brand advertising business margin was 9%, a sharp drop from 38% reported in the year-ago quarter but marked an increase of 1% from the third quarter. Non-GAAP gross margin for the search and search-related business in the quarter was 48%, down from 55% in the year-ago quarter.
Non-GAAP gross margin of the company’s online game business remained flat year over year at 78%.
Sohu’s non GAAP net loss was $69 million as against profit of $$65 million reported in the year-ago quarter.
Balance Sheet
Sohu exited the quarter with cash and cash equivalents (and short-term investments) of $1.30 billion, compared with $1.42 million as of Dec 31, 2015.
Outlook
For the first quarter of 2017, Sohu expects revenues in a range of $345 million–$375 million.
Management estimates brand advertising revenues in a range of $75 million to $85 million, representing 32% to 40% year-over-year decline.
Sogou revenues are expected to be in a range of $145 million to $155 million. Online game revenues are expected in a band of $80 million–$90 million, indicating a year-over-year decline of 12% to 22%.
The company expects non-GAAP loss per share to be between $1.55 and $1.80.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 915.6% due to these changes.
Sohu.com Inc. Price and Consensus
Sohu.com Inc. Price and Consensus | Sohu.com Inc. Quote
VGM Scores
At this time, Sohu.com's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.