Sohu Estimates, Target Skyrocket After Blowout Q1

RBC jacked its Sohu (SOHU) 2008 estimates and target after the company’s strong Q1:

  • 2008E revenue to $383 million from from $298 million
  • 2008E EBITDA to $159.5 million from $101 million
  • 2008 EPS to $2.82 from $2.16.

China’s second largest portal had a blockbuster Q1, reporting revenues of $84.8 million and adjusted EPS of $0.64, both well ahead of consensus estimates of $69.3 million and $0.45. Guidance also came in above expectations, calling for 2Q08 revenues between $93 million and $96 million and a projected EPS between $0.72 and $0.75.


It is not often that we gain a year in terms of expectations, but SOHU’s 1Q08 report was just that. We believe the guidance is very achievable and there is once again upward bias to our estimates. Additionally, the YOY growth implied in the brand advertising guidance (45%-48%) vs. 1Q08’s 41% is starting to show the acceleration as we were expecting as we head into the Olympics in 3Q08.

Our target is now $80 vs. prior $65 as we raise our estimates. Maintain Outperform rating.

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