In a research report sent to investors, Oppenheimer analyst Ella Ji reiterated a Perform rating on Sohu.com (NASDAQ:SOHU), following the release of the company’s fourth-quarter results. No price target was provided.
Ji commented: “Revenue and EPS both exceeded our ests in 4Q14 due to CYOU’s strong game revenue and op expense reduction post-restructure. Mobile now represents 40% of revenue in media ad and 33% in video. Sogou rev growth slowed to 70% y/y vs 87% in 3Q, and Tencent-related products monetization appears a 2016 story. Mgmt guided 1Q15 rev growth at 16-20% y/y, in line with our 19%E, while non-GAAP EPS guidance points to a low range of ($0.95) to ($1.05), mainly reflecting high videocontent spending.”
The analyst added, “We anticipate content cost as % of rev will trend down afterwards, and SOHU’s total op spending will return to a more reasonable level in 2015. However, the company still lacks exciting drivers.”
