Stock to Observe: Sogou Inc. (NYSE: SOGO)

On 27 Nov 2019, Sogou Inc. (NYSE: SOGO) spotted trading -30.08% off 52-week high price. On the other end, the stock has been noted 53.23% away from the low price over the last 52-weeks. The stock changed -0.40% to recent value of $4.98. The stock transacted 457652 shares during most recent day however it has an average volume of 1077.18K shares. The company has 399.54M of outstanding shares and 50.81M shares were floated in the market.

Sogou Inc. (SOGO) recently reported its unaudited financial results for the third quarter ended September 30, 2019.

Third Quarter 2019 Highlights

Total revenues were $314.9M, a 14% increase year-over-year, or a 17% increase in RMB terms.

Net income attributable to Sogou Inc. was $36.6M, a 53% increase year-over-year. Non-GAAP net income attributable to Sogou Inc. was $40.9M, a 46% increase year-over-year.

Sogou Mobile Keyboard had 464M DAUs (daily average users), up 14% year-over-year. As China’s largest voice app, it processed up to 830M daily voice requests.

Third Quarter 2019 Financial Results

Total revenues were $314.9M, a 14% increase year-over-year.

Search and search-related revenues were $288.2M, a 13% increase year-over-year. The increase was primarily Because of growth in auction-based pay-for-click services. Auction-based pay-for-click services accounted for 88.7% of search and search-related revenues, contrast to 82.7% in the corresponding period in 2018.

Other revenues were $26.7M, a 25% increase year-over-year. The increase was primarily Because of increased revenues from sales of smart hardware products.

Cost of revenues was $189.3M, a 9% increase year-over-year. Traffic acquisition cost, a primary driver of cost of revenues, was $143.7M, a 6% increase year-over-year, representing 45.6% of total revenues, contrast to 48.9% in the corresponding period in 2018.

Gross profit was $125.6M, a 22% increase year-over-year. Non-GAAP gross profit was $125.7M, a 22% increase year-over-year.

Total operating expenses were $98.2M, a 10% decrease year-over-year.

Research and development expenses were $50.0M, relatively stable year-over-year, representing 15.9% of total revenues, contrast to 18.3% in the corresponding period in 2018.

Sales and marketing expenses were $37.5M, a 14% decrease year-over-year, representing 11.9% of total revenues, contrast to 15.8% in the corresponding period in 2018. The decrease was primarily attributable to a decrease in marketing and promotional spending.

General and administrative expenses were $10.7M, a 31% decrease year-over-year, representing 3.4% of total revenues, contrast to 5.6% in the corresponding period in 2018. The decrease was primarily Because of a decrease in expenses related to non-core business initiatives.

Operating income was $27.4M, contrast to an operating loss of $6.8M in the corresponding period in 2018. Non-GAAP operating income was $31.6M, contrast to non-GAAP operating loss of $2.7M in the corresponding period in 2018.

Other income, net was $7.6M, contrast to $24.0M in the corresponding period in 2018. The decrease was primarily Because of a $17.8M gain from one of the Company’s equity investments recognized in the corresponding period in 2018.

Income tax expense was $2.4M, contrast to an income tax benefit of $0.4M in the corresponding period of 2018.

Net income attributable to Sogou Inc. was $36.6M, a 53% increase year-over-year, contrast to net income of $23.9M in the corresponding period in 2018. Non-GAAP net income attributable to Sogou Inc. was $40.9M, a 46% increase year-over-year, contrast to net income of $28.0M in the corresponding period in 2018.

Basic and diluted earnings per ADS were $0.09. Non-GAAP basic and diluted earnings per ADS were $0.10.

As of September 30, 2019, the Company had cash and cash equivalents and short-term investments of $1.1B, contrast with $1.0B as of December 31, 2018. Net operating cash inflow for the third quarter of 2019 was $19.6M. Capital expenditures for the third quarter of 2019 were $0.7M.

Its earnings per share (EPS) expected to touch remained 69.30% for this year while earning per share for the next 5-years is expected to reach at 15.63%. SOGO has a gross margin of 35.30% and an operating margin of 3.40% while its profit margin remained 6.90% for the last 12 months. According to the most recent quarter its current ratio was 2.8 that represents company’s ability to meet its current financial obligations. The price moved ahead of -4.94% from the mean of 20 days, -3.23% from mean of 50 days SMA and performed 0.00% from mean of 200 days price. Company’s performance for the week was -0.99%, -3.30% for month and YTD performance remained -5.14%.

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