IQ - iQIYI, Inc.
| Previous Close | 23.91 |
| Open | 23.19 |
| Bid | 23.88 x 1000 |
| Ask | 23.89 x 1100 |
| Day's Range | 22.87 - 23.98 |
| 52 Week Range | 15.12 - 29.18 |
| Volume | 5,810,349 |
| Avg. Volume | 6,285,275 |
| Market Cap | 17.413B |
| Beta (5Y Monthly) | N/A |
| PE Ratio (TTM) | 22.59 |
| EPS (TTM) | N/A |
| Earnings Date | N/A |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | N/A |
| 1y Target Est | N/A |
- MarketWatch
China tech stocks fall amid virus concerns
Shares of Chinese tech companies are off in Tuesday's session amid anxiety about a new coronoavirus that has claimed at least six lives in China so far. Ahead of what's expected to be a busy travel season around Lunar New Year, there's concern that the virus could spread even farther globally, especially after a medical expert said it could be transmitted between humans. Asia markets fell Tuesday, and U.S.-listed tech companies are also under pressure. Shares of iQiyi Inc. , Baidu Inc. , Alibaba Group Holding Ltd. , and JD.com Inc. are all off in morning trading. The KraneShares CSI China Internet ETF is down nearly 4% in the session, while the S&P 500 is down 0.2%.
- InvestorPlace
Is iQiyi Stock Worth $15 or $30?
On Jan. 7, Chinese video streaming service iQiyi (NASDAQ:IQ) announced a strategic partnership with Astro, a leading Malaysian satellite television operator. Under the deal, IQ will market its platform to Astro's customer base. Source: NYC Russ / Shutterstock.com InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs IQ's growth slows, its expansion outside China was inevitable. However, at this point, it's hard to know if the move indicates that IQ stock is worth $30 per share or $15 per share.Here's a look at both sides of the argument. IQ Stock Is Worth $30 Per ShareThe lack of movement by the company's stock since the partnership was announced suggests that investors aren't reading too much into the situation. Instead, they're opting to patiently wait for IQ to build a business in Malaysia. Since it's taken iQiyi more than ten years to convert its nonpaying Chinese users to paid memberships, it's unlikely that it will generate meaningful revenues from Malaysia for at least the next 12-24 months.Is IQ just trying to divert attention away from its domestic business, which is slowing significantly? I don't know the answer to that. * The Top 5 Dow Jones Stocks to Buy for 2020 What I do know is that IQ will have to spend a great deal of money to boost IQ stock by capturing market share in China's smaller cities. iQiyi doesn't necessarily have that kind of money. For IQ, grabbing some of the low-hanging fruit in Malaysia seems like a better proposition than banging its head against the proverbial Chinese Wall.InvestorPlace columnist Jonathan Berr made an excellent point about iQiyi in December, stating that the video streamer's ad-supported service is a great way to keep users viewing its content, instead of moving to a competing service. He added that Netflix (NASDAQ:NFLX), which is scrambling to hang on to its U.S. fan base, should offer an ad-supported service. Although the cost of expanding outside of China could be burdensome for IQ at this point of its development, I don't think it had any choice. After it reported single-digit-percentage revenue growth for the third quarter, it had to do something. By being bold and proactive, iQiyi CEO Tim Gong Yu is sending a message to shareholders that he's got a plan for global domination. In the meantime, IQ stock has traded above $20 for more than a month, which suggests that investors expect the company to report decent fourth-quarter results when they are slated to be unveiled in late February. IQ Stock Is Headed Back to $15In late September, I advised investors to wait for IQ stock to fall to $15 before buying the shares. I thought IQ would drop to $15 after it announced its Q3 results on Nov. 6. IQ stock fell as low as $15.12 on Oct. 2. Since then, it's gained 60%.To fall back to $15 before the end of 2020, it would have to lose nearly 40% of its value. In 2018, it fell from $40 in June to below $15 in December. That was a 63% decline in just six months. So IQ stock could potentially fall to $15 this year.In September, I wrote that IQ's Q3 guidance, which called for revenue growth of between 4% and 10%, was conservative. To my dismay, its Q3 sales grew 7%, precisely the midpoint of its guidance. That's not horrible, by any means, but it certainly does not justify the valuation of IQ stock, which is trading at 4.2 times its sales. By comparison, Netflix trades at 8.1 times its sales. NFLX, however, generated operating profit of $2.4 billion over the 12 months that ended in September, while iQiyi lost a boatload of money. With IQ stock at $24, I think its downside risk over the next six months is greater than its potential gains. If iQiyi delivers another stinker of a quarter in February, you can be sure IQ stock will fall below $20.At this point, I would wait until after IQ's earnings to buy IQ stock because right now IQ is looking more like a $15 stock than a $30 stock.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post Is iQiyi Stock Worth $15 or $30? appeared first on InvestorPlace.
- Zacks
Moving Average Crossover Alert: iQIYI
iQIYI, Inc. (IQ) is looking like an interesting pick from a technical perspective, as the company is seeing favorable trends on the moving average crossover front.
- Zacks
Will iQIYI Continue to Surge Higher?
As of late, it has definitely been a great time to be an investor in iQIYI.
- Zacks
iQIYI's Overseas Expansion to Stir Up Streaming Competition
The international video streaming space, currently dominated by Netflix, is getting hotter with iQIYI's (IQ) entry.
- InvestorPlace
Avoid Huya Stock as It Approaches Resistance
Chinese equities have been back in favor as the trade-war rhetoric between the U.S. and China continues to improve. While Huya (NYSE:HUYA) has been enjoying a rebound, it's not climbing as much as its peers. As Huya stock rallies into the end of the year, should investors buy the shares before it's too late?Source: Shutterstock Look at the one- and three-month returns for a handful of Chinese equities in the table below. It's pretty clear that Huya stock is continuing to struggle, even after its latest rebound. Worse, the stock's technicals do not favor the bulls at the moment, unless it suddenly gets a large burst of momentum that will send it over its resistance.Stock 1M Return 3M Return (NYSE:BABA) 14.6% 20.8% IQ 15.7% 17.6% (NASDAQ:JD) 13.3% 19.5% BILI 11.2% 22.3% (NASDAQ:BIDU) 9% 25.3% (NASDAQ:YY) (8.7%) (10.6%) HUYA (18%) (34.2%) As you can see, this stock has been displaying relative weakness at a time when its peers, Chinese stocks, and the overall markets are rallying. That's worrisome for the owners of Huya stock. Given the price action, it's hard to get overly bullish on the name. Let's look at the charts, which also aren't too encouraging.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Trading Huya Stock Click to Enlarge Source: Chart courtesy of StockCharts.comFor much of 2019, Huya stock was trapped between range support near $19 to $19.50 and range resistance around $26. When the stock failed to overcome its resistance in November, Huya sank below all of its major moving averages. Instead of Huya Inc finding buyers at range support, though, the sellers of the shares stepped on the gas.Huya stock cascaded through the $19 to $19.50 support area and bottomed at $16.40. The stock has since found its footing around $17 and has broken through its steep downtrend resistance (depicted by the blue line). * 7 Stocks to Buy to Get 2020 Started the Right Way So now what?The charts look ever-so-slightly more constructive at the moment. A short-term bottom has been reached, while a short-term uptrend (depicted by the purple line) is in place. Further, the MACD (depicted by the blue circle) is rotating into bulls' favor as the momentum of Huya stock begins to turn more positive. That said, the sellers remain in control.Bulls' first hurdle is the 20-day moving average. If they can push HUYA through this mark, there's a much larger hurdle overhead. Prior support at $19 to $19.50 is likely to act as resistance. If that's the case, the tone will shift to a much more bearish note for Huya stock.If the bulls can reclaim the former range support, higher targets would become realistic. But before we can even begin discussing those, the following test will prove most notable. Long story short, the bears need to defend $19, turning former range support into resistance, while the bulls need to defend the $17 level and avoid making new lows. The FundamentalsHuya stock has been lagging its peers, and its technicals do not favor the bulls. Because of that, the stock should not be bought until it clears some vital levels. That said, Huya Inc is still a quality company.Analysts, on average, predict that its revenue will surge 71% this year and another 36% in 2020. Unlike some of its peers, including iQiyi (NASDAQ:IQ) and BiliBili (NASDAQ:BILI), HUYA is actually profitable.Average forecasts call for earnings of 45 cents per share this year, up 50% from last year. For 2020, the mean estimate calls for an acceleration up to 75% earnings growth, good for earnings of 79 cents per share. That's lofty, but if the company can achieve it, Huya stock would currently be trading at just 22 times its forward earnings.That valuation would look cheap to many investors, given the company's strong growth and profitability, even if Huya stock is far from being a blue-chip name.Finally, its balance sheet is solid. The company's cash and short-term investments of 9.53 billion CNY easily outweigh all of its current liabilities, which stand at just 2.17 billion CNY. Further, Huya Inc does not carry any long-term debt. The Bottom Line on HuyaWhen the fundamentals and technicals do not align, some investors (like me) are in a tough spot. There is a solution, though.Technical investors can wait for the charts to confirm that bulls are back in control with a move over $19. Fundamental investors can take a long position near current levels, but use a stop-loss below the recent low of $16.40. If Huya Inc falls below that mark, it could reach the all-time low of $14.44.Investors should not get caught in a plunge. even if the company's fundamentals are good. Remember, risk can be defined and if investors sell due to a stop-loss being triggered, they can always get back in. Finally, some investors may find it best to take a partial position, while using proper risk controls on a decline and adding to the position if the technicals begin to look more favorable.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy to Get 2020 Started the Right Way * 10 Best ETFs for 2020: The Competition Is Stacked Full of Potential * 4 Gold Stocks to Buy as the Yellow Metal Surges The post Avoid Huya Stock as It Approaches Resistance appeared first on InvestorPlace.
- InvestorPlace
Is iQiyi Stock a Breakout Buy Right Now?
iQiyi (NASDAQ:IQ) stock was sold to retail investors as "the Netflix (NASDAQ:NFLX) of China." Of course, that drummed up some pretty serious demand, with IQ stock running from about $15 in April 2018 to more than $45 in less than two months.Source: Shutterstock Since that blow-off top though, iQiyi stock has been in the doldrums. Of course, being sold as "the NFLX of China" doesn't help when Netflix stock is struggling as well. * These 7 S&P 500 Stocks Will Deliver a Repeat Performance in the Next Decade In any regard, IQ stock is more like a blend between Netflix and Google's (NASDAQ:GOOG, NASDAQ:GOOGL) YouTube. And it does operate in China, which is a huge advantage, considering many platforms -- YouTube and Netflix included -- are banned from the country.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's not hard to see that iQiyi has a huge opportunity in front of it. With China's population nearing 1.4 billion and with more than 800 million internet users, it's no secret that streaming video should be a lucrative spot.So why is the NFLX and YouTube of China doing so poorly? Shouldn't IQ stock be riding high? Click to Enlarge Source: Chart courtesy of Statista. What's Up With iQiyiThere have been a few problems with iQiyi stock since it came public in Q2 2018. First, the company loses plenty of money. In the seven quarters that it has reported as a public entity, IQ has missed profit estimates in six of those events.For the record, it missed revenue estimates for three of those seven quarters, although it has now beat estimates four quarters in a row. Still, the company's inability to control spending and report better-than-expected bottom-line figures has investors frustrated and concerned.While the numbers should play the only role, my personal opinion is that geography has played a large role in the fate of IQ stock as well. It doesn't help that there's an ongoing trade-war saga between the U.S. and China. But even worse is that most, if not almost all U.S. investors are unfamiliar with iQiyi's platform.How many U.S. investors have actually used it? Now compare that to Netflix or YouTube and it's hard to say that IQ -- net losses or not -- commands the same valuation as some of its U.S. counterparts.That's not a knock on the American investor, it's just an observation. It's one that makes sense, too. People invest in what they know, and if they don't know iQiyi, they're less likely to buy IQ stock.To overpower that lack of interest, IQ needs to be better about cost control. It's not as if it's profitable and missing estimates -- it's unprofitable and missing expectations. The cash burn is quite concerning, and while user growth is still strong (+31% last quarter), revenue grew just 6.5% year-over-year.A lack of investor awareness and a trade war don't help, but cutting costs and reducing cash burn would help significantly. Trading IQ Stock Click to Enlarge Source: Chart courtesy of StockCharts.comShould iQiyi stock start to turn the corner by improving revenue growth and reducing its losses, the stock price could take off. Already we're seeing an improvement in IQ stock.As you can see on the daily chart, iQiyi stock has struggled with the 200-day moving average. This metric has been resistance for many months, weighing on IQ each time it rallies. However, on Friday Dec. 6, the stock rallied through and closed above this mark.It was a significant development, and while IQ stock has declined in the two days since, it has closed above the 200-day moving average in both sessions. I'm not sure it will hold, but the development has been promising for bulls.On the plus side, uptrend support (purple line) and the 20-day moving average have been guiding IQ stock higher. Should they fail as support, it could send iQiyi stock down to the 50-day moving average. However, if they continue to act as support, look to see if IQ stock can keep above the 200-day moving average and the 38.2% retracement just under $20. Above both levels may mark a turning point for the iQiyi stock price.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * These 7 S&P 500 Stocks Will Deliver a Repeat Performance in the Next Decade * 7 Tech Stocks to Stuff Your Stocking With * 7 Sinfully Good Casino Stocks That Could Win the Jackpot in 2020 The post Is iQiyi Stock a Breakout Buy Right Now? appeared first on InvestorPlace.
- Insider Monkey
Is iQIYI, Inc. (IQ) A Good Stock To Buy ?
Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Our research shows that most of the stocks that smart money likes historically generate strong […]
- InvestorPlace
3 Big Stock Charts for Friday: Advance Auto Parts, iQiyi, and Crown Castle International
U.S. stocks seem to have returned to normal. A two-and-a-half session sell-off has been followed by a rally of equal length. While broad market indices remain modestly off their highs, it does seem like stability, at least, has returned heading into 2020.Source: Shutterstock In that context, the question at the moment is whether there's enough time, and enough optimism, for one more leg higher before year-end. And that question is of particular importance when looking at Friday's big stock charts. * 7 Hot Stocks for 2020's Big Trends All three stocks have missed out on at least part of this year's rally. And all three big stock charts show at least the potential for a breakout in the near-term. It will take some outside help, however -- with stronger broad market sentiment the simplest source at the moment.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Advance Auto Parts (AAP)Source: Provided by Finviz So far, 2019 has not been kind to Advance Auto Parts (NYSE:AAP). AAP stock actually has declined a bit over 3% this year, making it one of just 81 stocks in the S&P 500 in the red for 2019. The first of Friday's big stock charts suggests the news could get worse -- but there's hope for a reversal: * The exit from an ascending triangle pattern last week generally is a bearish move, and indeed AAP stock saw a small gap down on Tuesday. It seems likely that $154, which formerly acted as support, is reversing to resistance. That, too, suggests a negative outlook. * That said, AAP has found its footing in the past two sessions, with modest declines on heavy buying. There are buyers willing to step in at the moment. And if AAP can find a way to grind higher, there is some reason for bullishness. $154 could again act as support. Moving averages will come in. * Click to Enlarge Source: Provided by Finviz From a broad perspective, this simply is a stock still looking for direction. That's true looking at 2019 trading and going back to early 2016. With some bullishness toward the sector and/or broad markets, the stock's direction could reverse. * The concerns might be both valuation and the lack of a catalyst. AutoZone (NYSE:AZO) reports earnings next week, and good news could read across to both AAP stock and rival O'Reilly Automotive (NASDAQ:ORLY). But AZO stock has a similar valuation to AAP, and Advance Auto Parts earnings last month disappointed. Good news from AutoZone might lead investors to buy AZO moreso than AAP. So while there's potential for an upside reversion in Advance Auto Parts stock, this may be a 2020 story without a significant year-end market-wide rally. iQiyi (IQ)Source: Provided by Finviz The setup is there for Chinese streaming video play iQiyi (NASDAQ:IQ). If IQ stock can rally, the second of our big stock charts shows a path toward a breakout: * There's clear resistance from a near-term standpoint. IQ stock twice has stalled out at $20 in recent months. The broader trend is still modestly negative. And the 200-day moving average sits right at current levels. But if IQ stock can move above $20, the trend will look positive. The stock would make a bullish exit from a narrowing wedge. It would have cleared all three moving averages, and broken out the downtrend that has held since May. * All that said, a reversal is possible as well, given the multiple trendlines creating resistance. A reversal likely would move the stock back toward support around $17. * As I wrote this week, the swing factor might be the broader market. As I noted in October, IQ stock has somewhat missed out in the rally in Chinese stocks due to a reticence by U.S. investors to pay up for unprofitable companies. Shares still have lagged the likes of JD.com (NASDAQ:JD) and Alibaba (NYSE:BABA), both of which have reached 52-week highs in recent weeks. Investors are willing to take on China risk. If they're back to taking on growth stock risk as well, a breakout looms for iQiyi stock. Crown Castle International (CCI)Source: Provided by Finviz Celullar tower real estate investment trust Crown Castle International (NYSE:CCI) has struggled since reaching an all-time high in September. But CCI stock has righted itself over the last month, and the last of Friday's big stock charts shows hope for a rebound: * CCI stock is in the middle of a downtrend at the moment -- but it's also in the middle of a narrowing wedge. A move through the 50-day moving average would challenge a key pivot point at $138, and set shares up for a bullish exit. The trend certainly isn't confirmed yet, but a continued near-term rally could set up a breakout that would re-test September highs. * Meanwhile, valuation is reasonable. The stock trades at 22.7x the midpoint of 2019 guidance for adjusted funds for operations per share. Looking to 2020, the multiple drops closer to 21x. A 3.56% dividend yield adds to the case, particularly in a low interest rate environment and with the payout hiked 7% in October. * Click to Enlarge Source: Provided by Finviz It may be the sector, and 5G stocks more broadly, that define the near-term direction of CCI stock. Perhaps surprisingly, 5G plays have struggled of late. Qualcomm (NASDAQ:QCOM) has reversed since earnings. Nokia (NYSE:NOK) plunged after its Q3 report. And rival American Tower (NYSE:AMT) has a similar chart (and perhaps stronger hopes for a breakout from a descending triangle), though a higher valuation and lower yield. If bullishness toward 5G returns, the chart sets CCI up to be a prime beneficiary.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post 3 Big Stock Charts for Friday: Advance Auto Parts, iQiyi, and Crown Castle International appeared first on InvestorPlace.
- Reuters
China video streamer iQiyi sees price hikes at home, gold abroad
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.
- InvestorPlace
Is IQiyi Stock Still Worth Betting On?
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 danablankenhorn@gmail.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 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.
- InvestorPlace
Economic Fundamental Issues Aside, IQ Stock Has an Identity Crisis
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.
- InvestorPlace
Multiple Challenges Will Keep iQiyi Stock Subdued
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.
- InvestorPlace
Be Careful With the Recent Rally in iQiyi Stock
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.
- InvestorPlace
IQ Stock Is Heating up Just as the Trade War Appears to Be Cooling
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 danablankenhorn@gmail.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.
- Zacks
iQIYI (IQ) Q3 Loss Narrower Than Expected, Revenues Rise Y/Y
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.
- MarketWatch
U.S. iQiyi stock rises on narrower-than-expected loss
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.
- Zacks
iQIYI (IQ) Set to Report Q3 Earnings: What's in the Cards?
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.
- InvestorPlace
The One Thing iQiyi Stock Needs to Return to Glory
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.
- InvestorPlace
3 Chinese Stocks to Buy If the Trade War Wraps Up
Many investors believe that the ongoing U.S.-China trade war is pressuring Chinese stocks. If that's the case, there should be no shortage of stocks to buy on hopes the dispute is resolved.To be honest, I'm somewhat skeptical that the trade war has had the impact some investors believe. It's true that after the dispute began last year, Chinese stocks fell sharply. But U.S. stocks declined as well during the fourth quarter. It was a "risk-off" market, and Chinese stocks have more than their fair share of risk. Meanwhile, the market generally does have a long-term focus, and few investors believe that the trade war, and its effects, will last forever.That said, there no doubt has been some impact on Chinese equities. Trade factors are pressuring the domestic economy, for instance. So it's certainly possible that a trade deal could lead directly to a rally in Chinese stocks, even if that rally might not be quite as significant as some bulls believe.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe next step is finding the best stocks to buy when the trade war is eventually resolved. These three stocks look like the best choices at the moment. * 7 Stocks to Buy With 100% Upside Potential One is a high-risk bet worth taking, and thus precisely the kind of bet aggressive investors should take on hopes of a deal. The other two strike a nice balance between quality and upside: strong enough to manage through until a trade war resolution is reached, and with enough growth potential that a resolution might materially change the long-term outlook. All three look like strong picks for China bulls. Chinese Stocks to Buy: iQiyi (IQ)There are three core reasons why streaming video play iQiyi (NASDAQ:IQ) is a smart choice for investors betting on a trade war resolution. First, as I've argued going back to last year, IQ stock looks like an attractive bet for China bulls in general.Even though the oft-made comparison to Netflix (NASDAQ:NFLX) is somewhat simplistic, the gap in valuation between the two stocks is immense. Investors who would prefer the long-term growth of Chinese stocks to the lower risk of U.S. issues should consider iQiyi stock regardless of near-term factors.Second, iQiyi has seen significant impact from the trade war already. Lower advertising revenue, driven by macro weakness, has hit recent quarterly results. Overall top-line growth has decelerated noticeably as a result. True, other Chinese stocks like Baidu (NASDAQ:BIDU) and Sina (NASDAQ:SINA) have seen similar pressures. But both companies have broader secular concerns in terms of user traffic that have contributed to their own selloffs. IQiyi likely would see an immediate financial benefit from a trade agreement, which in turn would help iQiyi shares.And, finally, as I wrote this week, IQ stock has been hit by sentiment changes among U.S. traders as well. Growth stocks have fallen across the board. It would seem likely that higher-risk group would get a bounce on a trade deal, which would only contribute to the upside potential for IQ in such a scenario. Tencent Music Entertainment (TME)Tencent Music Entertainment (NYSE:TME) is another high-risk, high-reward play. But the case at the moment is intriguing.Like IQ stock, TME has important differences relative to its Western counterparts, in this case Spotify Technology (NYSE:SPOT) and Sirius XM (NASDAQ:SIRI) unit Pandora. Its social entertainment business -- essentially live streaming -- still drives the majority of profit and revenue. Growth there is decelerating, a potential risk to TME stock.But Tencent Music Entertainment has another notable distinction: it's profitable. In fact, TME stock currently looks reasonably cheap. Backing out nearly $3 billion in cash on the balance sheet, shares trade for roughly 24x 2020 consensus earnings-per-share estimates. That's a reasonable multiple for a company still early in its growth, and one with obvious opportunity to expand music consumption in the country.There are risks. A Chinese antitrust investigation could upend the business model. Competition will remain intense. * 10 Small-Cap Stocks to Buy Before They Grow Up But all Chinese stocks have risks. The backing of parent Tencent (OTCMKTS:TCEHY), growth potential and valuation combine for an attractive bull case regardless. Those positive attributes don't look priced in at $14. If a trade war deal can drive increased confidence toward the Chinese consumer, they will be priced in. NetEase (NTES)Despite a $35 billion market capitalization, online gaming company NetEase (NASDAQ:NTES) seems overlooked among Chinese stocks. It shouldn't be, as there's a lot to like here.NetEase has a dominant market position in its vertical. Revenue growth has slowed, but lower spending has led to impressive profit growth. Non-GAAP net income rose 33% year-over-year in the second quarter, which followed a monster earnings beat in Q1.And yet NTES stock is cheap, at just 17x forward earnings. It looks far too cheap. Gaming growth in China will continue. The IPO of education arm Youdao (NYSE:DAO) further strengthens the balance sheet. And margins should continue to improve.NTES stock has risen 50% from December lows, but it still sits below early 2018 highs. As sentiment improves toward Chinese stocks, NetEase should benefit.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Cybersecurity Stocks to Keep Your Portfolio Safe * 7 Top-Notch REITs to Buy for Income * 5 Reasons Why I Still Believe in Hexo Stock The post 3 Chinese Stocks to Buy If the Trade War Wraps Up appeared first on InvestorPlace.
- InvestorPlace
The Problem with IQ Stock Might Be the U.S., Not China
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.
- Insider Monkey
Is iQIYI, Inc. (IQ) A Good Stock To Buy?
Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The last 12 months is one of those periods, as the Russell 2000 […]
- InvestorPlace
iQiyi Stock Is Really Not the Next Netflix
Most investors would love to have the next Netflix (NASDAQ:NFLX) in their portfolio. But make no mistake, buying iQiyi (NASDAQ:IQ) stock is not the way to enjoy that kind of storied investment.Source: Faizal Ramli / Shutterstock.com Over the last decade -- and despite a more drawn out correction over the past year -- shares of NFLX stock have returned more than 5,000% to its long-term investors. At its best, a gain in excess of 10,000% was staring some shareholders squarely in the face. I wish I had that foresight while browsing the aisles of Blockbuster. But I'm here to plea investors to let bygones be bygones. Don't think buying IQ stock simply because it's hailed as China's Netflix is going to fix anything.To be certain, some investors will argue that while iQiyi has been likened to Netflix, its business model also includes platforms similar to Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) YouTube and privately held Twitch. And I get it, that pitch sounds even more compelling. But more importantly, IQ stock faces an uphill battle off and on the price chart.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Chinese Stocks and a Rough 2019The past year of course hasn't just been painful for IQ stock. More than a few Chinese stocks like Alibaba (NYSE:BABA) and Tencent (OTCMKTS:TCEHY) can blame the trade war with the United States as being in large part responsible for their underperformance since 2018. But iQiyi has much deeper issues. * 10 Super Boring Stocks to Buy With Super Safe Returns As original content costs skyrocket, the increasingly expensive streaming market will continue to become more challenging for iQiyi stock. It's a trend which shouldn't be dismissed. And with the company nowhere close to turning a profit -- and going through cash like water trying to make a name for itself -- that point is all the more important. And by the way, Alibaba and Tencent? Those two tech titans also happen to be very well-capitalized threats to IQ's success.Sure, bulls could try to look at IQ's impressive subscriber data and believe with roughly 93% of China's 1.4 billion population still untapped, that there's only upside for iQiyi stock price. But as InvestorPlace's Josh Enomoto eloquently discusses, it's simply not that easy.Then there's IQ stock's price chart. From a quick glance, it's easy enough to hope for a bullish resolution. But again, if the story looks to good to be true, watch out below. IQ Stock Weekly ChartIt's not fun being the bearer of bad news, but I take the responsibility seriously. It would be very easy to be bullishly appreciative of a potential triple bottom taking shape on the weekly price chart with iQiyi stock. With last week's hammer candlestick, a rally above $16.94 would confirm the pattern. You'll get no argument there. It is what it is.Still, a break of technical support could get even uglier for IQ stock as new lows are made. And this isn't only because iQiyi's stochastics are failing to hint at a bottom or that broken patterns can be powerful motivators -- especially large ones like IQ's.IQ stock, plain and simple, is highly speculative. And where the rubber meets the road, bottoming formations of this type should be reserved for stocks which have the backing of stronger fundamentals that support longevity or aren't already showing signs of stagnating growth. Again, thanks Josh.Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. . For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post iQiyi Stock Is Really Not the Next Netflix appeared first on InvestorPlace.
- Benzinga
Option Trader Makes Big Bet On iQiyi Despite Negative Trade War Headlines
Shares of Chinese online video platform iQiyi Inc (NASDAQ: IQ) dropped another 3% on Tuesday and are now down 38.4% overall in the past year as the trade war between the U.S. and China appears to be ramping up once again. On Tuesday morning, Benzinga Pro subscribers received an option alert related to an unusually large iQiyi trade.
