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What's in the Cards for iQIYI (IQ) This Earnings Season?

Zacks Equity Research

iQIYI IQ is set to report second-quarter 2019 results on Aug 19.

In the last reported quarter, the company reported adjusted loss of 35 cents per share. The loss was narrower than the Zacks Consensus Estimate of a loss of 52 cents.

Revenues surged 43% from the year-ago quarter to RMB6.99 billion ($1 billion).

Total subscribers increased 57.9% year over year to 96.8 million in the first-quarter.

For the second quarter, management anticipates total revenues between RMB6.91 billion ($1 billion) and RMB7.29 billion ($1.1 billion).

The Zacks Consensus Estimate for revenues is currently pegged at $1.06 billion, indicating growth of 13.4% from the year-ago quarter’s reported figure.

iQIYI, Inc. Sponsored ADR Price and EPS Surprise

iQIYI, Inc. Sponsored ADR Price and EPS Surprise
iQIYI, Inc. Sponsored ADR Price and EPS Surprise

iQIYI, Inc. Sponsored ADR price-eps-surprise | iQIYI, Inc. Sponsored ADR Quote


The consensus mark for second-quarter earnings has been steady at a loss of 43 cents over the past seven days.

Let’s see how things are shaping up prior to this announcement.

Key Factors to Watch

iQIYI’s solid content slate is a key catalyst. The company released The Legend of White Snake and The Thunder in the to-be-reported quarter. Notably, The Thunder received an overwhelming response in China and AT&T’s T HBO acquired the Southeast Asia licensing rights of the series.

Further, the company’s ability to bring exclusive and original content to its platform is likely to expand the subscriber base. The success of the original variety show The Big Band is noteworthy in this regard. Launched during the second quarter, this musical variety show featured 31 top Chinese bands.

Notably, iQIYI’s subscriber base surpassed 100 million in the to-be-reported quarter.

Moreover, partnerships with the likes of Microsoft MSFT division LinkedIn, Viacom, Ctrip, AIS and China Unicom Global Limited are expected to boost user engagement.

Notably, LinkedIn became the first partner of iQIYI’s Knowledge App. The partnership was announced at the 2019 iQIYI World Conference. LinkedIn will exclusively provide rich video content on global and local professional learning, and interviews with global business key opinion leaders.

Additionally, iQIYI’s gaming business strengthened post its acquisition of Skymoons. The expanding gaming portfolio is expected to drive the top line in the second quarter.

However, the online advertising business is likely to be sluggish due to the unfavorable macroeconomic environment in China and slower-than-expected recovery of in-feed advertising.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Stocks with a Zacks Rank #4 or 5 (Sell rated) are best avoided.

iQIYI has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Momo MOMO has an Earnings ESP of +2.04% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutanix NTNX has an Earnings ESP of +4.80% and a Zacks Rank #3.


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iQIYI, Inc. Sponsored ADR (IQ) : Free Stock Analysis Report
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