Overview
Jefferies has reaffirmed its Buy recommendation on Sohu.com (NASDAQ: SOHU) and kept its price target at $20.00 after the company's fourth-quarter reporting. That price target represents approximately a 22% premium to the stock's current trading level of $16.36. An external analysis noted the stock is trading at a price-to-earnings ratio of about 3.2, a valuation the firm characterized as attractive and consistent with the positive analyst stance.
Quarterly performance
Sohu.com's fourth-quarter revenue beat Jefferies' estimates. Both the marketing services division and the online gaming segment delivered results ahead of the broker's forecasts. The company reported very healthy gross profit margins of 76.88%, a metric that contributed to a financial health score categorized as "GOOD" by the referenced analysis.
On a non-GAAP basis, operating profit came in line with Jefferies' projections. Non-GAAP earnings outpaced analyst expectations, a shortfall-avoiding result that management attributed to tax benefits which lifted the bottom line.
Guidance and upcoming discussion
For the first quarter of 2026, Sohu.com provided forward guidance. The midpoint of the marketing services revenue guidance was below Jefferies' expectations, while the online games segment outlook matched the firm's estimates. Company management plans a conference call to discuss the quarter and guidance on Monday at 8:30 pm Hong Kong time (7:30 am Eastern Time).
Context from prior quarter
Separately, Sohu.com's third-quarter results had previously exceeded expectations, with total revenue and non-GAAP earnings beating forecasts. In response to those outcomes, Jefferies raised its price target on the shares from $18.00 to $20.00 while maintaining a Buy rating. Jefferies highlighted the strong performance of the gaming segment as a key driver behind the favorable earnings and the subsequent target upward revision.
Takeaway
The analyst action leaves Sohu.com with a Buy rating and a $20.00 target following a quarter of revenue outperformance and sizable gross margins, though near-term visibility is mixed given marketing services guidance entering the new year. Investors and market participants can hear management discuss the results during the scheduled conference call.
Note: The article presents company-reported results, Jefferies' published rating and price target, the stated valuation metric, guidance for Q1 2026, and the scheduled call time as reported.