20.28 -0.01 (-0.03%)
After hours: 4:11PM EST
|Bid||20.28 x 34100|
|Ask||20.32 x 800|
|Day's Range||19.59 - 20.66|
|52 Week Range||14.35 - 29.18|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||19.14|
|Earnings Date||Nov 6, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||20.40|
Chinese video streaming company iQiyi hopes to have as many as half its subscribers in overseas markets in five years despite Sino-U.S. trade tensions and increased government censorship at home, founder and chief executive Gong Yu told Reuters in an interview. The company, China's answer to Netflix, has its sights set on Southeast Asia, where it is signing marketing deals with local partners. It also working to sell white-label versions of its streaming platform around the world, Yu said in a presentation at the Asia TV Forum in Singapore.
Dr. Gong Yu, Founder and CEO of iQIYI, Inc. (NASDAQ:IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, recently attended the 20th Asia Television Forum & Market ("ATF" or the "Event") and delivered a keynote speech on iQIYI's service model and growth strategy as a technology-driven entertainment platform, as well as his outlook for the development of the Asian and global entertainment industry.
IQiyi (NASDAQ:IQ) stock opened Dec. 2 trying to hold the bounce it got from the company's recently reported third-quarter earnings.Source: NYC Russ / Shutterstock.com The Chinese streaming media company beat estimates with a loss of $516 million, 70 cents per share fully diluted, on revenue of $1 billion.Membership revenue, however, was up 30%, to $520 million. There was also a 12% gain in "other," mainly video game revenue from licensing titles to a company called Skymoons. The problem was in ad revenue, which was down on softening consumer markets. The company's conference call, however, set big plans to offer content on regular TVs, in theaters and through Virtual Reality, not just through mobile phones.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIQiyi has analysts pounding the table for IQ stock and I've been bullish on it myself. IQ Stock: More YouTube Than NetflixIQiyi is a bet on the "New China," a high-tech consumer culture with unlimited potential. If your image is of "Communist China," the oppressive one-party state threatening America on every side, you don't want to invest in IQ.While it's sometimes called the "Netflix (NASDAQ:NFLX) of China," IQiyi is more like China's YouTube, only with a highly proprietary twist. * 7 5G Stocks to Buy Now for the Future Like the Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) video unit, iQiyi rides on its parent's content delivery system, hosts in its cloud and shares its technology obsessions, in this case, faith in Artificial Intelligence. It also hosts the social media content around its shows. Unlike YouTube, however, iQiyi owns most of its own content and can fully monetize it in games and merchandising.Parent Baidu (NASDAQ:BIDU), retains a 48% stake in iQiyi. IQiyi is in a tight race for market leadership with units of Alibaba (NYSE:BABA) and Tencent Holding (OTCMKTS:TCEHY).Baidu, however, is no Google. Baidu has been a terrible investment, the shares down 48% over the last five years. That's why ancillary units like IQ were spun out. Baidu also reported a strong third quarter, however. Betting on YuIQiyi was founded in 2010 by Tim Gong Yu. If you're betting on iQiyi today, you're betting on him. He sees the Chinese market as completely unlike that of the West -- far more volatile. He sees opportunities in locally produced films that, like Netflix's The Irishman, go first into cinemas and then online.IQiyi also runs its movies through an AI analysis on genre, characters, story arc and target audience before final changes are made and the film is released. Rather than just analyzing what people watch, iQiyi tries to figure out who will watch its movies before releasing them.The IQ programs that Gong Yu greenlights are mostly high-touch games, soap operas and adventure stories the company holds full title to. IQ creates its own programming ideas, executes them and holds rights to everything inside them. * 10 Buy-and-Hold Stocks to Own Forever IQiyi has 105.3 million subscribers or members, but also sells ads. It is in a race with rivals to penetrate smaller "third-tier" cities where consumers have more time than money, and to expand internationally. It recently signed a strategic partnership covering Malaysia. The Bottom Line on IQ StockTo believe in iQiyi stock, you must first believe in China as a large consumer market with an expanding geographic horizon.Seen in that light, Tim Gong Yu is a good man to bet on. He has full control over his content, a good understanding of his market and access to leading-edge technology. As a spinoff rather than just a unit manager, he is also fully in charge.Even for younger investors, this is a speculation. IQ is a stock you put some of your "mad money" on; money you can afford to lose. If the world blows up, you're toast, but if it doesn't, you could win big.Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing, he owned shares in BABA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Things to Watch for into 2020 for Safer Income & Growth * 7 Entertainment Stocks to Buy to Escape Holiday Blues * 5 "Strong Buy" Biotech Stocks With More Than 80% Upside The post Is IQiyi Stock Still Worth Betting On? appeared first on InvestorPlace.
Recently, I gave my personal take on streaming when I purchased a Roku (NASDAQ:ROKU) device. Previously, I was tethered to the cord, always talking about the benefits of cutting it, but never truly understanding it. But with Roku, I wholeheartedly get why millions everywhere are abandoning traditional TV. With that, has my take on iQiyi (NASDAQ:IQ) and IQ stock changed?Source: NYC Russ / Shutterstock.com Often billed as China's Netflix (NASDAQ:NFLX), the investment concept of iQiyi stock appealed to those far smarter than me. These are the folks that saw the writing on the wall when it came to traditional TV. Following the implications to their logical conclusion, they cut the cord and joined the streaming revolution.Indeed, buying a Roku device and enjoying previously unattainable benefits like on-demand content made me appreciate all streaming companies. I'm not just talking about IQ, but rather, the decision of big-name companies like Disney (NYSE:DIS) and AT&T (NYSE:T) to focus on content consolidation and streaming now made much more sense.InvestorPlace - Stock Market News, Stock Advice & Trading TipsClearly, streaming is the future, but will that future benefit IQ stock? Unfortunately, I have my doubts. * 7 Silver and Gold Stocks to Buy That Offer Contrarian Upside The company's most recent earnings report for the third quarter didn't help bolster confidence. Although IQ reported narrower-than-expected per-share profitability, it fell a bit short on revenue. Against a consensus target of $1.02 billion, the Chinese streaming giant instead rang up $1 billion flat.That didn't stop enthusiasm in iQiyi stock following the earnings disclosure. However, shares quickly came back down to earth over the next several sessions.Worryingly, IQ stock dropped over 4% in the midweek session of Nov. 13. Rather than a discount, I see more volatility ahead. IQ Stock Is Suffering an Identity CrisisOn paper, analysts consider Q3 as a mixed report: a beat on profitability expectations but a miss on revenue. But based on the technical performance of iQiyi stock, as well as the broader fundamental picture, I view the Q3 report as unambiguously disappointing.Inarguably, IQ is a growth stock. The underlying company sacrifices positive net income in the here and now to invest in expansionary mechanisms. In terms of subscriber growth, management is achieving its goals, but in terms of sales growth, they're flat to declining. Click to EnlargeIt wasn't just that Q3 2019 results produced revenue of $1 billion. Instead, over the last six quarters now, iQiyi has averaged revenue of $1.01 billion. And in Q3 2018, top-line sales came in just under $1.02 billion. As I said, the streaming firm's sales trajectory is flat to declining.Criticize Netflix all you want: the U.S.-based streaming company has consistently grown quarterly revenue over the last five years. And because of this historical consistency, Netflix has generated positive net income for several years.But for IQ stock, a reasonable pathway to profitability is fading. Since at least 2015, net income has progressively sunk deeper into red ink. This year will continue this dubious trend unless we see a miraculous result in Q4.And that won't happen. In the most recent quarter, IQ's net income was a loss of $516 million. In the year-ago quarter, it was a loss of $458 million. Clearly, the company is going the wrong way.Ordinarily, for a growth stock, you'd comfort yourself with the growth narrative. But that's also moving in the wrong direction for IQ stock. No matter where you turn, the fundamentals don't make much sense. China Is a Poor Market for iQiyi StockOne of the other things I like about my Roku device is content options. From programming geared toward family viewing to NC-17 rated stuff, I control what I want to watch.That's the beauty of America and the western civilized world: we have the freedom to do how we please, so long as we don't infringe upon other people's rights. I believe we have the French to thank for this brilliant idea.However, this mentality doesn't fly in China. Internet censorship has long dogged attempts by American technology firms to break into the Chinese market. We're talking huge brands like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Facebook (NASDAQ:FB).Supposedly, Chinese censorship is designed to protect pride in the mainland, which to some level I can understand. But it also devolves into the ridiculous, such as censorship of men wearing earrings.And you know what? When it comes to entertainment, censorship stinks. It's bad enough that IQ stock is having trouble with its underlying growth narrative. But to have a government-level headwind on top of it? This renders shares a speculative gamble rather than a sustainable investment.As of this writing, Josh Enomoto is long AT&T. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Tech Stocks to Buy for the Rest of 2019 * 7 Biotech Stocks to Buy With Plenty of Power in the Pipeline * 5 Stocks to Buy That Are Set for Monster Growth in 2020 The post Economic Fundamental Issues Aside, IQ Stock Has an Identity Crisis appeared first on InvestorPlace.
When iQiyi (NASDAQ:IQ) announced its third-quarter results, IQ stock surged higher on strong subscriber growth, climbing from $17.5 to $20.But the momentum has failed to continue, and iQiyi stock fell back to $18.5 in a few trading sessions. I believe that IQ stock is likely to remain subdued because its business faces multiple challenges.Source: NYC Russ / Shutterstock.com One of the biggest challenges for IQ, like most Chinese streaming companies, is increasing its average revenue per user.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe number of streaming video-on-demand subscribers in China is estimated to be 305 million. In the United States, the number of subscribers is estimated to be 158 million. * 10 Cheap Stocks to Buy Under $10 However, total subscription revenue in the U.S. is likely to be about $20.4 billion, versus $8.9 billion in China. That works out to monthly revenue per user of $10.76 in the U.S., compared to $2.43 in China. Clearly, subscriber monetization in China is inadequate.Further, IQ reported total subscribers of 105.8 million in Q3, 99.2% of whom were paying subscribers. Its Q3 membership revenue was $520 million, so its average monthly revenue per subscriber was around $1.65.Supporting my conclusions, Ampere Analysis stated: "Specifically, one of China's big three online video platforms, iQiYi, has an average discount rate of 33% with an ARPU of just $1.80 compared to a monthly cost net of tax of $2.80."IQ's subscriber growth is certainly positive, and I expect its strong growth to continue. However, IQ might need to increase its subscription revenue at some point. IQ's Cash Burn Will ContinueIQ's subscriber growth comes at a meaningful cost. Specifically, IQ has to bankroll the creation of new content to keep existing subscribers engaged and to attract new subscribers.In Q3, IQ's revenue from its members was $520 million and its content costs came in at $870 million. Its content cost per paid subscriber per month was $2.76, versus its average monthly revenue per user of $1.65. Therefore, there is a clear, negative gap between its membership revenue and its content cost.As long as that gap fails to narrow meaningfully, iQiyi will continue to burn cash. It is worth noting that, in Q3, the company's operating-level loss increased to RMB2.8 billion, compared to RMB2.6 billion in the same period a year earlier.IQ does have RMB4.5 billion of cash and RMB6.8 billion of short-term investments. So it can afford to burn cash. However, its lack of profitability will certainly be reflected by IQ stock.IQ will soon invest more in content than China's top broadcasters. Furthermore, the growth of its content investments will not decelerate because it faces competition from Tencent (OTC:TCEHY) Video and Youku. Competition will prevent IQ from meaningfully increasing its fees. Expansion Beyond ChinaOne of the growth strategies for iQiyi is expansion beyond China. The company is looking at moving into Southeastern Asia countries, including Malaysia, Indonesia and Thailand.But Tencent Video already has a presence in all of those nations. Therefore,IQ will have to charge competitive membership fees in the countries. As a result, expanding to those countries probably won't slow its cash burn.iQiyi also plans to distribute content to North America, Singapore, South Korea and Japan. But for now, it appears to be focusing on Southeast Asia. Concluding Thoughts on IQ StockIQ has enough cash to survive for years. However, investors want to see the company develop a strategy to boost its ARPU. If the company fails on that front, IQ stock is unlikely to rally much.It is worth noting that, despite its volatility, iQiyi stock is largely at the same level as it was last year. Given the company's challenges, IQ stock will likely remain rangebound for an extended period.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Stocks to Buy Under $10 * These 10 Stocks to Buy Make the Perfect 'Retirement' Portfolio * 5 Streaming Stocks to Buy for Huge Upside Over the Next Decade The post Multiple Challenges Will Keep iQiyi Stock Subdued appeared first on InvestorPlace.
BEIJING , Nov. 12, 2019 /PRNewswire/ -- iQIYI, Inc. (NASDAQ: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China , recently won multiple ...
Shares of beaten and bruised Chinese streaming giant iQiyi (NASDAQ:IQ) have bounced back recently, rallying more than 20% over the past month to four-month highs thanks to easing U.S.-China trade tensions, rebounding Chinese economic activity, and better-than-expected third-quarter profit numbers.Source: NYC Russ / Shutterstock.com But, when it comes to the recent rally in IQ stock, investors should proceed with caution.Sure, things are getting better for iQiyi. Long story short, the economic fundamentals in China should improve over the next few quarters, and this will create a rising tide which lifts all boats, iQiyi included. At the same time, iQiyi's margins -- which have been tumbling for several quarters -- are showing signs of stabilizing.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, things aren't getting that much better. iQiyi's revenue growth trajectory remains challenged by a lack of fiscal demand for streaming content in China. Heightened competition in the digital ad market also presents a risk to sustained revenue growth at scale. Content costs are still swelling, as are research and development costs. Margins are still hugely negative, and dropping. Profits are still a long ways out -- and the pathway to sustainable profits lacks clarity.All in all, there are major problems underlying iQiyi stock, meaning that recent strength in the stock may not be all that sustainable. iQiyi's Fundamentals Are ImprovingThe fundamentals underlying IQ stock have improved substantially over the past few months.It all started a month ago, when it became clear that the vicious U.S.-China trade war cycle was coming to an end. Specifically, thanks to both sides agreeing to work on a series of mini trade deals, investors broadly came to the conclusion that U.S.-China trade tensions were in the early innings of permanent deescalation. If true, that means that the biggest headwind to China's economy is set to ease going forward, and easing therein should drive a rebound in China's economic activity.Naturally, this rebound will provide a tailwind for iQiyi's revenue growth trajectory, which has flattened out over the past quarters alongside the Chinese economy. Of note, businesses should spend more on advertising, providing a boost to the digital ad market, from which iQiyi draws a big source of revenues. Also, consumers should be more willing to pay up for streaming content, which should provide a nice lift to iQiyi's subscription revenues.At the same time, iQiyi recently reported third quarter profit numbers which topped expectations. Importantly, operating margins only dropped 80 basis points year-over-year in the quarter, versus several hundred basis points of compression in each of the past few quarters. The implication is that margins are finally starting to stabilize, and that's a positive development in this company's pathway to profitability.Big picture: iQiyi's micro and macro fundamentals have simultaneously improved over the past month, and this improvement is why IQ stock has rattled off a 20%-plus gain over that stretch. iQiyi Stock Still Has ProblemsAlthough the fundamentals here have improved, they still aren't good, and that means there is reason for caution when it comes to IQ stock.iQiyi's revenue growth trajectory is rapidly decelerating. Sure, China economic activity may rebound. But, at the current moment, we are looking at a company that has gone from 43% revenue growth in Q1, to 15% revenue growth in Q2, to 7% revenue growth in Q3, to a projected 1% rise in revenues in Q4. Behind this slowdown, the ad business is tumbling, while the subscription business is adding users, but at very low price points.A rebound in Chinese economic activity doesn't guarantee much help on either front. Even if businesses do spend more on ads, the competitive landscape in China's digital ad market is so intense that iQiyi may not win over many of those new ad dollars. Further, China's consumers have remained largely healthy despite the economic slowdown, so if they weren't willing to pay up for iQiyi content over the past few months, they likely won't pay up anytime soon, either.On the margin front, content costs are running higher because good content is needed to attract new subscribers and keep old ones, while R&D costs are also running higher thanks to increased headcount growth. Because these costs continue to swell against the backdrop of flattening revenues, negative profit margins are heading even lower.Until the revenue growth trajectory turns around -- and there's no telling when it will -- there is a tremendous lack of visibility as to when iQiyi's margins will ever improve, let alone peak into positive territory. So long as this remains the case, it will be tough for any strength in IQ stock to find fundamental support. Bottom Line on IQ StockIQ stock has shown signs of strength of recently. But, this strength appears to based on hope, not fundamentals. The fundamentals here remain weak, dominated by the notion that iQiyi is a slowing growth company running huge losses, without a clear pathway to ever producing a profit.Does a stock with those fundamentals deserve to trade at 3.5-times trailing sales? No. So, when it comes it IQ stock, proceed with caution.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Sell Before They Roll Over * 5 Beaten-Up Stocks to Buy That Could Be Saved By An Acquisition * 4 Startup Stocks Getting Smashed The post Be Careful With the Recent Rally in iQiyi Stock appeared first on InvestorPlace.
If the trade war with China is about to end with a whimper, Iqiyi (NASDAQ:IQ) looks cheap. IQ stock rose 6% on Nov. 6.Source: NYC Russ / Shutterstock.com The Chinese video streaming company was helped both by a quarterly report that was less bad than feared and word that China is ready to bury the trade hatchet with the U.S.Iqiyi is a partial spin-off of Baidu (NASDAQ:BIDU), the Chinese search engine company. It lost $4.34 per share on revenue of $1 billion during the September quarter but had 30% more subscribers than a year ago. The company also signed a deal to deliver its content in Malaysia, which has a large Chinese-speaking population.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs a result, the stock rose 6.53% in pre-market trade to open November 7 at $18.60, a market cap of nearly $12.4 billion. Baidu shares also rose, by 4%. Is IQ Stock Cheap?Reporting on the quarter varied depending on what reporters were looking at. Variety, an entertainment magazine, emphasized the deepening losses. Financial reporters at Marketwatch emphasized that the losses were less than expected. * 7 Stocks to Sell Before They Roll Over In fact, the losses were just about in line with the company's 30% subscriber growth rate.Shares of all Chinese stocks have been depressed during the trade war. IQiyi (pronounced ee-KWI-kwee) stock is little changed from where it was when the year started.But the company has changed. It now has about 105 million paying subscribers, almost entirely in China. This compares favorably with Netflix' (NASDAQ:NFLX) 97.6 million subscribers outside the U.S.IQiyi, however, is much cheaper, just $2-3 per month, and its programming is supported by advertising. Netflix, which takes no advertising, is only in China thanks to a 2017 partnership with IQiyi.While IQ has been growing its subscriber base, advertising revenue was down 14% year-over-year in the latest quarterly report. The company blamed this on the local economy and intense competition. IQ's total subscriber count runs neck-and-neck with that of Tencent Holdings (OTCMKTS:TCEHY) and Alibaba Group Holding (NASDAQ:BABA).In comparison to U.S. tech companies, however, IQ is dirt cheap. Its market cap is about three times its revenue, the subscriber count continues to rise, and long-term debt is low. If trade peace is more than just a rumor, IQ stock should take off. IQ ProspectsIQ is interesting because of its differences with Netflix, not its similarities.IQiyi seeks to completely monetize both its talent and its programming. Netflix merely signs production and delivery agreements with producers. IQ develops and owns its own shows, it advertises against them, and it sponsors concerts to develop talent.More important, IQiyi is primarily a mobile service. It's designed to deliver short bursts of fun to Chinese students and workers during their commutes and work breaks. Netflix, by contrast, is built around TVs and long-form evening programming.The hope of IQ bulls is that the end of the trade war will spark the economy, especially the consumer side. That would deliver more advertising revenue, which is the part of the equation that's lagging. The Bottom Line on IQ StockI counseled patience on buying IQ last spring, and such patience has been rewarded. Shares have fallen 25% since March.I have also emphasized its differences with Netflix, but there are similarities. IQiyi has high initial costs for programming detective shows, romantic comedies and costume dramas. These are covered by convertible notes instead of pure debt. This means the upside in IQ stock is limited. Big gains will move people to turn bonds into stock.Still, if you believe in China, in the Chinese market, and in Chinese ingenuity, IQ stock may be one of the best ways to play that faith. It's a long-term speculative play for young investors who want to diversify outside the U.S.Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in BABA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Sell Before They Roll Over * 5 Beaten-Up Stocks to Buy That Could Be Saved By An Acquisition * 4 Startup Stocks Getting Smashed The post IQ Stock Is Heating up Just as the Trade War Appears to Be Cooling appeared first on InvestorPlace.
iQIYI's (IQ) third-quarter 2019 results benefit from strong subscriber growth. However, deferred content launches and decline in online advertising services revenues remain dampeners.
U.S. shares of iQiyi Inc. rose in the extended session Wednesday after the Chinese online entertainment company reported a narrower-than-expected loss for the quarter. iQiyi ADRs rose 5% after hours, following a 1.9% decline in the regular session to close at $17.46. The company reported a third-quarter loss of $516 million, or 70 cents a share. Revenue rose 7% to $1 billion from the year-ago quarter. Analysts surveyed by FactSet had forecast a loss of 71 cents on revenue of $1.04 billion. iQiyi expects fourth-quarter revenue of $960 million to $1.02 billion, while analysts had forecast on revenue of $1.01 billion.
BEIJING, Nov. 06, 2019 -- iQIYI, Inc. (NASDAQ: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, today announced its unaudited.
KUALA LUMPUR, Malaysia, Nov. 6, 2019 /PRNewswire/ -- iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, announced today that it has reached a strategic partnership with Astro, Malaysia's major pay-television service provider. Based on the global operations of the iQIYI App (the "App"), iQIYI will be cooperating with Astro on marketing and localization of iQIYI's services. Through iQIYI's middle-end for technology, products and content, Astro will be able to benefit from iQIYI's operational capacity; while iQIYI can reach local users through Astro's strong media and marketing networks.
iQIYI's (IQ) third-quarter 2019 results are likely to reflect a strong content portfolio and solid demand for company-produced drama series, original movies and variety shows.
BEIJING , Oct. 31, 2019 /PRNewswire/ -- iQIYI, Inc. (NASDAQ: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China , today announced that ...
BEIJING, Oct. 29, 2019 /PRNewswire/ -- On October 24, iQIYI, Inc. (IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, released the second season of original 3D naval fantasy adventure animation series Beyond the Ocean (the "Animation"). The new season also employs motion capture technology and a game CG production team to ensure that the animation quality is as smooth and real as possible. Adapted from the popular book series of the same name, the Animation received widespread praise from fans of the original novel and animation fans upon the release of its first season.
When iQiyi (NASDAQ:IQ) burst onto the scene, it earned the nickname of "the Netflix (NASDAQ:NFLX) of China." So we know it operates in a viable segment that has years of runway ahead of it. IQ stock soared to $46 per share in June of 2018, but it has since fallen from grace and is now mired under $20 and cannot regain its momentum.Source: NYC Russ / Shutterstock.com The general malaise created by the economic war between the U.S. and China has crippled all China-related stocks like IQ. So the fall from grace may not reflect a deterioration in its fundamental opportunity. In fact, year-to-date although IQ is down 13%, it is doing better than NFLX stock, which is down 18% for the same period. What IQ Stock Needs for a ComebackSo there is a possible comeback for IQ stock. But several levels of resistance stand in the way of prior glory. What management says soon will be pivotal. To that, IQ gained some momentum last week. But technically, it is approaching heavy resistance. The zone around $18 per share has been important for at least a year. And in September, the stock failed exactly there and almost retested the Christmas correction lows from 2018. So, clearly, it's up to the bulls to prove that they can overcome it this time.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Stocks to Buy and Hold Forever The first order of business for the buyers is to keep the iQyi stock price above $17 per share to retain control of the price action. This will allow them to maintain the higher-low trend while they attack the resistance neckline and this won't be easy. The 12-month point of control is near $18.50 and these usually are strong resistance on the way up. This is where bulls and bears have agreed to fight it out hard the most in the past 12 months.Neither side will want to let it go easily.But it's not all about technicals. IQ management will have the stage early November and they can tell their fundamental story. The one thing that they must do is meet or beat the expectations but most importantly guide higher going forward. Wall Street has no patience for timid forecasts. They need an emphatically strong story for the next quarter. Nevertheless, the short-term reaction to earnings events is almost completely binary. So from a trading perspective, earnings events have a lot of guesswork.So investors in IQ stock for the next two weeks have to be nimble and tactical. The improved rhetoric from the U.S. and China economic war has helped the stock stabilize a bit. But it's not out of the woods yet because nothing has really changed. The negotiations are still ongoing and there is talk of a deal. But there's nothing in writing yet so it can all fall apart with one headline. This will affect the momentum that IQ stock and it's Chinese cohorts.So conviction is medium at best in any short-term IQ trade. Investors need to remember that headlines cut both ways. If they finally actually ink a deal between the U.S. and China, all China-based stocks will soar, and IQ stock has a lot of ground to make up. * 7 Defense Stocks to Buy to Fortify Your Portfolio If by any chance the bulls are able to overcome the current short-term resistance, they will then have to contend with an even bigger failure level at $20 per share. This is an even more pronounced pivot level, so it's even harder than $18 a share. The options market may provide a safer way to bet on IQ for the next few weeks. Emphasis on the word bet because given the headline risk and the earnings event there's a lot of guesswork involved in trading IQ stock.This is not the same as to say that fundamentals don't matter, because they do.However for the time being, the strategy is hostage to external factors. Clearly IQ provides a service that is in demand. It is in fact dubbed the Netflix of China, but it also still needs to grow into its valuation. Actual metrics are murky, so the chart price action is more reliable from the trading perspective. They say that price is truth and it applies to this case during this volatile period. Check the emotions at the door and trade the tape in play.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room for free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 AI Stocks to Buy to Profit from the Recent Tech Correction * 5 IPO Stocks With Lockup Expiration Dates Around the Corner * 3 Clean Energy ETFs for a Brighter Future The post The One Thing iQiyi Stock Needs to Return to Glory appeared first on InvestorPlace.
BEIJING , Oct. 25, 2019 /PRNewswire/ -- iQIYI, Inc. (NASDAQ: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China , jointly with Galaxy ...
BEIJING, Oct. 24, 2019 -- iQIYI, Inc. (NASDAQ: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China, today announced that it will.
BEIJING , Oct. 24, 2019 /PRNewswire/ -- iQIYI, Inc. (NASDAQ: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China , announced recently ...
iQiyi (NASDAQ:IQ) stock keeps slipping. The stock touched an eight-month low earlier this month, and even with a recent rally sits 43% below February highs.Source: Faizal Ramli / Shutterstock.com There are some fundamental reasons for the decline. Trade war worries have pressured the Chinese economy. As a result, iQiyi's advertising sales dropped 16% year-over-year in the second quarter after a flattish performance in Q1. That weakness was just part of a Q2 report that looked concerning for IQ stock.That said, other Chinese companies are seeing similar pressures. And their shares have held up better. Alibaba (NYSE:BABA), for instance, trades just 13% below its 52-week high. JD.com (NASDAQ:JD), which like IQ is more of a growth play, is 7% off its highs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Safe Stocks to Buy and Hold Through 2020 The divergence in IQ stock suggests that at least part of the problem could lie with U.S. investors, rather than Chinese economic conditions. What that means for the stock might depend on whether those U.S. investors are right. iQiyi Stock UnderperformsAs noted, IQ stock has underperformed larger Chinese consumer plays. But the divergence holds looking elsewhere in the group. In fact, among 42 Chinese stocks with a market capitalization above $2 billion, only three are farther from their highs than IQ stock.Admittedly, two of those three are Baidu (NASDAQ:BIDU) and Sina (NASDAQ:SINA), which, like iQiyi, have seen pressure on ad sales. That said, IQ hardly has the same exposure to advertising. Roughly 30% of its second quarter revenue came from advertising. For Baidu, the figure was over 80% excluding iQiyi, which is included in its financial statements. (Baidu still owns a majority stake in iQiyi.)Meanwhile, IQ stock hasn't had a steep post-earnings fall, as both BIDU and SINA have. And yet it has performed almost as poorly. Obviously, trade war and macro worries have played a part. But essentially every other Chinese stock faces similar exposure, as even the largest companies still have minimal international exposure.The relative decline does make IQ stock intriguing for Chinese bulls -- as I've argued twice before. But the fall might not suggest the stock actually is cheap if the decline is coming, at least in part, from a rational response by U.S. investors. Is NFLX Stock Hitting IQ Stock?IQ stock seems to be underperforming Chinese peers despite decent earnings performance. (Both quarters have looked solid, though the company did miss second-quarter earnings per share estimates by a penny.) That might signal an opportunity. Bigger declines during the trade war should in turn lead to bigger gains if and when that dispute is resolved.I have made a similar case for IQ stock before, most recently in June. More so than other Chinese plays -- even leaders like BABA and JD -- IQ seemed to have the most potential for a rally when sentiment toward Chinese stocks improved. That thesis played out at the beginning of this year: iQiyi stock nearly doubled on its way to February highs.But there has been a notable change since February. U.S. investors are much, much less willing to pay up for unprofitable growth stocks. Netflix (NASDAQ:NFLX), for instance, to which iQiyi is often and not always accurately compared, has seen its shares drop over 25%. The pressure on recent IPOs like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) has been well-documented as well.The weakness in NFLX stock, in particular, may be causing IQ stock to slide. Much of the fundamental case for IQ since its IPO has been based on the valuation gap on a price-to-revenue basis between the two streaming companies. Some investors may see a cheaper NFLX as implying a cheaper IQ.But the broader pressure on stocks similar to IQ might be more to blame. Investors even are focusing on profitability in cannabis stocks. Cash-burning, loss-making stocks are not in vogue on U.S. markets right now. iQiyi stock is one of those stocks at the moment. To Buy or to Sell?If that indeed is the case, that makes the case for IQ perhaps more complex. Many investors believe a trade war resolution will boost stocks (though I'm personally skeptical on that front), and it might seem like consumer-focused IQ stock would be an obvious beneficiary.But if the problem includes pressure on unprofitable growth names, the trade war catalyst isn't as strong. And given the obvious near-term risks to waiting for some movement on that front, it's tough to recommend IQ stock at the moment.Of course, for risk-loving investors, the decline makes the stock even more attractive. IQ stock right now is valued at a little over $100 per subscriber. Netflix subscribers, when NFLX traded near $400, were worth as much as $1,000 each on the public markets.That kind of gap suggests iQiyi stock could have enormous upside if investors return to growth stocks and sentiment toward the Chinese economy improves. For investors willing to bet on both those developments, there may be no better opportunity in this market.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for Investors Fearing Another Q4 Downturn * 5 Penny Stocks to Buy If You Can Risk It * 7 Safe Stocks to Buy and Hold Through 2020 The post The Problem with IQ Stock Might Be the U.S., Not China appeared first on InvestorPlace.
BEIJING , Oct. 23, 2019 /PRNewswire/ -- iQIYI, Inc. (NASDAQ: IQ) ("iQIYI" or the "Company"), an innovative market-leading online entertainment service in China , recently announced ...
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