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Image: Bigstock (SOHU) Q4 Earnings: What's in the Cards?

Read MoreHide Full Article Inc. (SOHU - Free Report) is set to report fourth-quarter 2015 results on Feb 1. Let’s see how things are shaping up for this announcement.

Factors at Play

Sohu seems well positioned to benefit from strong traffic growth in search, online video and mobile businesses. The company expects strength in Sogou and Changyou to continue going ahead. Sogou is likely to benefit from increased investment in its search division.

Additionally, the partnership with Tencent is expected to boost Sogou’s traffic. Changyou’s strong R&D capabilities and a massive user base (owing to TLBB games) are likely to add to the company’s top line going ahead.

However, Sohu is a relatively small player in the online advertising market and continuing investments in product development are necessary to expand its market share. Additionally, the ongoing sluggishness in China is expected to hurt the company’s financials. In the last reported quarter, Sohu’s revenues were impacted by the depreciation of the Chinese currency against U.S dollar.

Amid all these, stiff competition from the likes of Baidu, Inc. (BIDU - Free Report) , and such others remain a concern.

For the fourth quarter of 2015, Sohu expects revenues in the range of $435 million–$465 million. The company expects non-GAAP loss per share to be between 40 cents and 65 cents. GAAP loss per share is expected to be in the range of 65 cents to 90 cents.

Stock to Consider

Here is a company which, according to our model, has the right combination of elements to post an earnings beat this quarter: 

SolarWinds, Inc. (SWI - Free Report) with an Earnings ESP of +2.27% and a Zacks Rank #1 (Strong Buy).

Energizer Holdings, Inc. (ENR - Free Report) with an Earnings ESP of +3.03% and a Zacks Rank #3 (Hold).

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