Brean Capital Reacts to Mixed 4Q Results for Sohu.com

In a report published Tuesday, Brean Capital analyst Fawne Jiang reiterated a Hold rating on Sohu.com (NASDAQ: SOHU).

In the report, Brean Capital noted, "SOHU reported mixed 4Q results and provided soft 1Q guidance with both revenue growth and earnings missing expectations. With SOHU's game growth outlook remaining uncertain and the transition of its portal ad business from PC to mobile, we may likely see near-term pressure on the company's overall top-line growth despite solid revenue growth from its online video business and search segment."

The report continued, "Additionally, while we are encouraged to see CYOU's return of profitability, Sogou's improving profitability and management's cost control efforts, we believe SOHU will face ongoing margin pressure as it continues to invest in mobile, video and search. As such, we will remain on the sidelines until we get better visibility on revenue reacceleration of its gaming business and on improving earnings potential for the company. We maintain our Hold rating on SOHU."

Sohu.com closed on Monday at $51.62.