Sohu.com (SOHU) Plunges 13.78% on Revenue Decline

Sohu.com (SOHU) shares plummeted 13.78% intraday, marking the lowest level since March 2024, with a cumulative decline of 25.26% over the past four days.

Sohu.com's stock price has been significantly impacted by the company's declining revenue performance. Despite the substantial drop in stock price, Sohu.com's price-to-sales (P/S) ratio remains comparable to the industry average, which is a cause for concern given the company's negative revenue growth outlook. Over the past three years, Sohu.com has experienced a 28% decline in revenue, and analysts predict a further annual decline of 0.2% over the next three years, while the industry is expected to grow by 12% per annum. This discrepancy between Sohu.com's P/S ratio and its poor revenue performance may lead to unsustainable current price levels, potentially setting up its shareholders for future disappointment if the P/S falls to levels more aligned with the negative growth outlook.