The Sohu.com (NASDAQ:SOHU) Share Price Has Gained 136%, So Why Not Pay It Some Attention?
Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Sohu.com Limited (NASDAQ:SOHU) share price has soared 136% return in just a single year. Then again, the 9.8% share price decline hasn't been so fun for shareholders. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. We'll need to follow Sohu.com for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Check out our latest analysis for Sohu.com
Because Sohu.com made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Sohu.com grew its revenue by 9.2% last year. That's not great considering the company is losing money. In contrast, the share price took off during the year, gaining 136%. The business will need a lot more growth to justify that increase. We're not so sure that revenue growth is driving the market optimism about the stock.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Sohu.com's financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that Sohu.com shareholders have gained 136% over the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 2.6%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for Sohu.com that you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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