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Sohu.com (SOHU) Down 9.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Sohu.com (SOHU - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sohu.com 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’s Q4 Earnings Outpace Estimates, Revenues Down Y/Y
Sohu reported fourth-quarter 2021 non-GAAP earnings of 9 cents per share, which beat the Zacks Consensus Estimate by a margin of 114.8%. The company had reported earnings of $1.18 per share in the year-ago quarter.
Fourth-quarter total revenues decreased 23.8% year over year to $193 million. In 2021, revenues were up 11.4% to $835.6 million.
Top-Line Details
In the quarter, Brand advertising revenues declined 19.6% year over year to $33.6 million, primarily due to lower portal advertising revenues. Online games revenues of $143.7 million fell 26.7% due to the decline of TLBB Vintage, which was launched during the fourth quarter of 2020. Other revenues totaled $15.6 million, up 1.3% year over year.
For PC games, total average monthly active user accounts (MAU) were 2 million, down 12% year over year, due to the decline of Changyou’s older games. Total quarterly aggregate active paying accounts (APA) were 0.9 million, flat year over year.
For mobile games, total average MAU was 2.5 million, up 3% year over year. Total quarterly APA was 0.5 million, down 14%. The decline was mainly from TLBB Honor and Illusion Connect.
Operating Details
Quarterly non-GAAP gross margin decreased to 73% from 79% in the year-ago quarter. Brand advertising’s non-GAAP gross margin decreased to 28% from 31%. Online games’ non-GAAP gross margin was 84%, down from the year-ago quarter’s 90%. Non-GAAP operating expenses were $143.8 million, up 8.9%. Sohu’s non-GAAP operating loss was $2.6 million against the year-ago quarter’s income of $68.2 million.
Liquidity
As of Dec 31, 2021, Sohu had $998.9 million in cash and cash equivalents with $443.1 million of long-term tax liabilities.
Q1 Outlook
For the first quarter of 2022, Brand advertising revenues are estimated in the range of $23-$26 million, which implies a decline of 15% to 25% year over year. Online game revenues are expected in the band of $130-$140 million, which indicates a year-over-year decrease of 21-26%. Sohu’s non-GAAP net loss is likely to be between $10 million and $20 million. GAAP net loss is projected between $13 million and $23 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 47.76% due to these changes.
VGM Scores
Currently, Sohu.com has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Sohu.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Sohu.com (SOHU) Down 9.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Sohu.com (SOHU - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sohu.com 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’s Q4 Earnings Outpace Estimates, Revenues Down Y/Y
Sohu reported fourth-quarter 2021 non-GAAP earnings of 9 cents per share, which beat the Zacks Consensus Estimate by a margin of 114.8%. The company had reported earnings of $1.18 per share in the year-ago quarter.
Fourth-quarter total revenues decreased 23.8% year over year to $193 million. In 2021, revenues were up 11.4% to $835.6 million.
Top-Line Details
In the quarter, Brand advertising revenues declined 19.6% year over year to $33.6 million, primarily due to lower portal advertising revenues. Online games revenues of $143.7 million fell 26.7% due to the decline of TLBB Vintage, which was launched during the fourth quarter of 2020. Other revenues totaled $15.6 million, up 1.3% year over year.
For PC games, total average monthly active user accounts (MAU) were 2 million, down 12% year over year, due to the decline of Changyou’s older games. Total quarterly aggregate active paying accounts (APA) were 0.9 million, flat year over year.
For mobile games, total average MAU was 2.5 million, up 3% year over year. Total quarterly APA was 0.5 million, down 14%. The decline was mainly from TLBB Honor and Illusion Connect.
Operating Details
Quarterly non-GAAP gross margin decreased to 73% from 79% in the year-ago quarter. Brand advertising’s non-GAAP gross margin decreased to 28% from 31%. Online games’ non-GAAP gross margin was 84%, down from the year-ago quarter’s 90%. Non-GAAP operating expenses were $143.8 million, up 8.9%. Sohu’s non-GAAP operating loss was $2.6 million against the year-ago quarter’s income of $68.2 million.
Liquidity
As of Dec 31, 2021, Sohu had $998.9 million in cash and cash equivalents with $443.1 million of long-term tax liabilities.
Q1 Outlook
For the first quarter of 2022, Brand advertising revenues are estimated in the range of $23-$26 million, which implies a decline of 15% to 25% year over year. Online game revenues are expected in the band of $130-$140 million, which indicates a year-over-year decrease of 21-26%. Sohu’s non-GAAP net loss is likely to be between $10 million and $20 million. GAAP net loss is projected between $13 million and $23 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 47.76% due to these changes.
VGM Scores
Currently, Sohu.com has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Sohu.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.