Citi cuts Sohu.com price target to $17, maintains Buy rating

On Monday, Citi analysts adjusted their outlook on Sohu.com (NASDAQ:SOHU), currently trading at $10.43, lowering the price target to $17 from the previous $18, while maintaining a Buy rating on the company’s stock. According to InvestingPro analysis, the stock appears undervalued with significant upside potential. The revision follows Sohu’s first-quarter 2025 financial results, which surpassed expectations, particularly in the online games segment.

Sohu’s online games revenue remained steady year-over-year and saw a 7% rise quarter-over-quarter, hitting $117 million. This performance was within the higher end of the company’s guidance range. The company maintains impressive gross profit margins of 72.29%, as reported by InvestingPro. Meanwhile, marketing service revenues also fared better than anticipated, reaching $14 million, which is a 2% beat against forecasts despite a year-over-year decline of 15% and a 27% drop from the previous quarter.

The company reported a non-GAAP net loss of $16 million, which was more favorable than the projected range of $16 to $26 million and notably better than Citi’s estimate of a $23 million loss. The smaller-than-expected loss was attributed to the stronger gaming revenues.

Looking ahead, Sohu provided mixed guidance for the second quarter of 2025. Marketing service revenues are expected to align with predictions, but online gaming is forecasted to fall short of pre-results estimates. Management indicated that the macroeconomic environment remains challenging and anticipates a cautious advertising spend budget for the second half of 2025.

In response to the current market conditions, Sohu has begun to integrate various artificial intelligence models into its game development strategies. Following a review and adjustment of estimates, Citi’s sum-of-the-parts (SOTP) valuation has been revised to $17. The firm maintains a Buy rating on Sohu stock, citing its valuation below cash and the support from a share repurchase program. The company’s strong financial position is evident in its healthy current ratio of 3.24 and low Price/Book ratio of 0.34. For deeper insights into Sohu’s financial health and growth potential, including 12 additional ProTips and comprehensive valuation metrics, check out the detailed Pro Research Report available on InvestingPro.

In other recent news, Baijiayun Group Ltd has announced its upcoming annual general meeting of shareholders, which will be held in Nanjing, China. This announcement was made through a Form 6-K submission to the U.S. Securities and Exchange Commission. The meeting is a standard procedure that allows shareholders to be informed about important company matters and to vote on various corporate decisions. While the specifics of the agenda were not disclosed, the filing ensures that Baijiayun Group remains compliant with U.S. regulatory requirements for foreign private issuers. The company has confirmed its commitment to continue filing annual reports under Form 20-F. This information was released by Baijiayun Group’s Chief Financial Officer, Fangfei Liu. Shareholders and interested parties are encouraged to review the SEC filing for more detailed information regarding the meeting.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.