When Will Sohucom Limited (NASDAQ:SOHU) Become Profitable?

Sohucom Limited’s (NASDAQ:SOHU): Sohu.com Inc. provides online media, search, and game services on personal computers (PCs), mobile devices, and tablets in the People’s Republic of China. The US$1.58b market-cap posted a loss in its most recent financial year of -US$554.53m and a latest trailing-twelve-month loss of -US$579.10m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is SOHU’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for SOHU.

Check out our latest analysis for Sohu.com

According to the industry analysts covering SOHU, breakeven is near. They expect the company to post a final loss in -1, before turning a profit of US$0 in . SOHU is therefore projected to breakeven around a few months from now. How fast will SOHU have to grow each year in order to reach the breakeven point by ? Working backwards from analyst estimates, it turns out that they expect the company to grow 64.44% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:SOHU Past Future Earnings June 12th 18
NasdaqGS:SOHU Past Future Earnings June 12th 18

Given this is a high-level overview, I won’t go into details of SOHU’s upcoming projects, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that SOHU has managed its capital judiciously, with debt making up 10.83% of equity. This means that SOHU has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on SOHU, so if you are interested in understanding the company at a deeper level, take a look at SOHU’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further research:

  1. Historical Track Record: What has SOHU’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sohu.com’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.