Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Sohu.com (Nasdaq: SOHU) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- SOHU's revenue growth has slightly outpaced the industry average of 22.8%. Since the same quarter one year prior, revenues rose by 32.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although SOHU's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. To add to this, SOHU has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 87.28% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SOHU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 69.2% when compared to the same quarter one year prior, rising from $12.78 million to $21.63 million.