Critical Analysis: Sohu.com (NASDAQ:SOHU) and Embracer Group AB (publ) (OTCMKTS:THQQF)

Sohu.com (NASDAQ:SOHU) and Embracer Group AB (publ) (OTCMKTS:THQQF) are both communication services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Sohu.com and Embracer Group AB (publ), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sohu.com	0	1	2	0	2.67
Embracer Group AB (publ)	0	0	0	0	0.00

Sohu.com presently has a consensus price target of $19.00, suggesting a potential upside of 30.14%. Given Sohu.com’s stronger consensus rating and higher probable upside, equities analysts plainly believe Sohu.com is more favorable than Embracer Group AB (publ).

Earnings & Valuation

This table compares Sohu.com and Embracer Group AB (publ)”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sohu.com	$584.33 million	0.65	$394.10 million	$8.57	1.70
Embracer Group AB (publ)	N/A	N/A	N/A	N/A	N/A

Sohu.com has higher revenue and earnings than Embracer Group AB (publ).

Profitability

This table compares Sohu.com and Embracer Group AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sohu.com	38.15%	21.63%	16.13%
Embracer Group AB (publ)	N/A	N/A	N/A

Insider and Institutional Ownership

33.0% of Sohu.com shares are held by institutional investors. 21.1% of Sohu.com shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Sohu.com beats Embracer Group AB (publ) on 9 of the 9 factors compared between the two stocks.

About Sohu.com

Sohu.com Limited engages in the provision of online media, video, and game products and services on personal computers (PCs) and mobile devices in China. It operates through two segments: Sohu and Changyou. The company offers online news, information, and content services through the mobile phone application Sohu News APP, mobile portal m.sohu.com, and www.sohu.com for PCs; and online video content and services through mobile phone application Sohu Video APP and tv.sohu.com, as well as ifox, a video application for PC. It also operates Focus (www.focus.cn), which provides online real estate information and services; and 17173.com website, which provides news, electronic forums, online videos, and other online game information services to game players, as well as offers mobile game distribution services. In addition, the company offers interactive online games for PCs and mobile devices. Further, it provides paid subscription and interactive broadcasting services. The company was incorporated in 1996 and is headquartered in Beijing, China.

About Embracer Group AB (publ)

Embracer Group AB (publ), together with its subsidiaries, develops and publishes PC, console, mobile, VR, and board games for the games market worldwide. The company also publishes films and comic books, as well as engages in the trading of card games. It distributes games through retailers, physical stores, and digital distributors. The company was formerly known as THQ Nordic AB (publ) and changed its name to Embracer Group AB (publ) in October 2019. Embracer Group AB (publ) was founded in 1990 and is headquartered in Karlstad, Sweden.