Sohu.com (SOHU) Is Today's Perilous Reversal Stock

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.

Trade-Ideas LLC identified Sohu.com ( SOHU) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sohu.com as such a stock due to the following factors:

  • SOHU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.8 million.
  • SOHU has traded 71,209 shares today.
  • SOHU is down 3.8% today.
  • SOHU was up 7.9% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SOHU with the Ticky from Trade-Ideas. See the FREE profile for SOHU NOW at Trade-Ideas

More details on SOHU:

Sohu.com Inc. provides online media, search, gaming, community, and mobile services in the People's Republic of China. SOHU has a PE ratio of 170.3. Currently there are 2 analysts that rate Sohu.com a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Sohu.com has been 743,100 shares per day over the past 30 days. Sohu.com has a market cap of $2.9 billion and is part of the technology sector and internet industry. The stock has a beta of 2.21 and a short float of 12.3% with 2.85 days to cover. Shares are up 8% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sohu.com as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 16.5%. Since the same quarter one year prior, revenues rose by 28.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, SOHU's share price has jumped by 73.84%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that SOHU's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.72 is high and demonstrates strong liquidity.
  • SOHU.COM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SOHU.COM INC swung to a loss, reporting -$0.47 versus $2.04 in the prior year. For the next year, the market is expecting a contraction of 157.4% in earnings (-$1.21 versus -$0.47).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 88.8% when compared to the same quarter one year ago, falling from $25.39 million to $2.83 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Dow and S&P 500 Finish Higher Amid Strong Corporate Earnings

Dow and S&P 500 Finish Higher Amid Strong Corporate Earnings

Veteran Foreign Affairs Expert Ian Bremmer Reveals How to Price Political Risk

Veteran Foreign Affairs Expert Ian Bremmer Reveals How to Price Political Risk

Investors Shouldn't Be Worried About Trump's Trade Tariffs: Ian Bremmer

Investors Shouldn't Be Worried About Trump's Trade Tariffs: Ian Bremmer

3 Hot Reads From TheStreet's Top Premium Columnists

3 Hot Reads From TheStreet's Top Premium Columnists

NYSE Suspends Trading for Some Shares of Nasdaq-Listed Amazon, Alphabet

NYSE Suspends Trading for Some Shares of Nasdaq-Listed Amazon, Alphabet