Sohu.com Debt-Free & Growing
Sohu.com, Inc. (
SOHU) is the 2nd-largest Internet portal and one of the most well-known online brands in China. Sohu's pipeline for its new online games remains strong and is expected to drive meaningful growth in late 2009 and 2010.
We are encouraged by the company's growing cash balance as well as its debt-free balance sheet. Additionally, Sohu generated record total revenues and net income for the 6th consecutive quarter during Q408 with impressive margins.
We believe that the current stock price does not fully reflect the company's intrinsic value. Concerns related to online ad spending and China's macro economy in 2009 remain. As such, we maintain our Buy rating on the shares of SOHU with a lower 6-month target price of $64.00.
Priyanka Poddar contributed to this report.
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