Changyou.com Limited (CYOU) & Sohu.com (SOHU) Head-To-Head Analysis

Changyou.com Limited (NASDAQ: CYOU) and Sohu.com (NASDAQ:SOHU) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Valuation & Earnings

This table compares Changyou.com Limited and Sohu.com’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Changyou.com Limited N/A N/A N/A $3.02 13.32
Sohu.com $1.66 billion 1.25 $84.89 million ($7.70) -6.94

Sohu.com has higher revenue and earnings than Changyou.com Limited. Sohu.com is trading at a lower price-to-earnings ratio than Changyou.com Limited, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Changyou.com Limited has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Sohu.com has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Profitability

This table compares Changyou.com Limited and Sohu.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Changyou.com Limited 30.03% 13.57% 9.19%
Sohu.com -17.93% -19.12% -11.55%

Analyst Recommendations

This is a breakdown of current ratings for Changyou.com Limited and Sohu.com, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Changyou.com Limited 1 6 1 0 2.00
Sohu.com 1 4 1 0 2.00

Changyou.com Limited currently has a consensus target price of $33.67, indicating a potential downside of 16.29%. Sohu.com has a consensus target price of $52.58, indicating a potential downside of 1.56%. Given Sohu.com’s higher possible upside, analysts clearly believe Sohu.com is more favorable than Changyou.com Limited.

Institutional & Insider Ownership

25.1% of Changyou.com Limited shares are held by institutional investors. Comparatively, 63.4% of Sohu.com shares are held by institutional investors. 21.0% of Sohu.com shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Sohu.com beats Changyou.com Limited on 5 of the 9 factors compared between the two stocks.

Changyou.com Limited Company Profile

Changyou.com Limited is an online game developer and operator. The Company is engaged in the development, operation and licensing of online games for personal computers (PCs) and mobile devices. The Company’s segments include Online Game segment, which consists primarily of PC games and mobile games; the Platform Channel segment, which consists primarily of online advertising services offered on the 17173.com Website, Internet value-added services (IVAS) offered on the Dolphin Browser and RaidCall and online card and board games offered by MoboTap, and the Cinema Advertising segment, which consists primarily of the acquisition, from operators of movie theaters, and the sale, to advertisers, of pre-film advertising slots, which are advertisements shown before the screening of a movie in a cinema theater. Its online games include a range of genres, including massively multi-player online role-playing games (MMORPGs), third person shooter games (TPSs) and collectible card games (CCGs).

Sohu.com Company Profile

Sohu.com Inc. (Sohu) is an online media, search and game service company, which is engaged in providing online products and services on personal computers (PCs) and mobile devices in the People’s Republic of China (the PRC). The Company operates through three segments: the Sohu segment; the Sogou segment, and the Changyou segment. The Sohu segment’s business is the brand advertising business, which offers to users, over its matrices of Chinese language online media, various content, products and services across multiple Internet-enabled devices, such as PCs, mobile phones and tablets. The search and search-related business primarily offers advertisers pay-for-click services, as well as online marketing services on Web directories operated by Sogou. Changyou’s business lines consist of the online game business; the platform channel business, which consists primarily of online advertising and also includes Internet value-added services (IVAS), and the cinema advertising business.

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