iQiyi (IQ)

iQiyi (IQ)

Postby winston » Sun Feb 17, 2019 8:52 am

not vested

iQIYI has rebounded 50% from its December low after losing two-thirds of its value during the sell-off. But it still remains well below its June all-time high of $46.23.

While it may take time to regain that high status, I am confident that fresh records will be achieved in the coming years. For buyers of the stock today, that would represent a double.

iQIYI is the leader in video streaming in a country that is home to more than 1.3 billion people and is growing its economy by 6%. Disposable income will grow as the middle class does, leading to more and more subscribers for IQ.

Subscriber growth is a key metric for companies like iQIYI -- just like it is for Netflix (NFLX) and Facebook (FB). The company is on the right track. Its premium subscriber total -- those who actually pay -- grew 89% over the last year to nearly 81 million people.

Also similar to NFLX when it was in its early stages of growth, IQ continues to lose money. But that's perfectly okay. When a company is focused mainly on growth, the next most important figure is the top line. iQIYI has increased revenue 48% over the last year, which is a very impressive number.

Now on to valuation. Based on iQIYI's current market cap of $14.5 billion and projected 2019 sales of $4.85 billion, the stock trades with a price-to-sales ratio of 2.99. Compare that to Netflix, which trades with a 2019 price-to-sales ratio of 7.43.

It is very common for a U.S.-based company to have a higher valuation than its Chinese peers. But with growth projections higher for IQ and the potential market in China wide open, trading at just 40% of NFLX's value makes IQ a huge bargain buying opportunity for long-term investors.

So ... is IQ a good buy at current prices near $20?

If you're an investor with a lot of patience and a strong long-term outlook, then I would answer that question with a big "yes!"

If you're still concerned about risk, you can establish tight stop losses.

Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: iQiyi (IQ)

Postby winston » Sat Mar 05, 2022 6:26 am

not vested

iQiyi, Inc. (IQ)

China makes up the world’s largest single online market – and that includes China’s online streaming services.

iQiyi is China’s largest streaming service, leading the market in country with both a voracious appetite for online content and over 800 million connected internet users.

For 2021 as a whole, revenues came in at $4.8 billion, up a modest 3% from 2020.

Looking at the final quarter of the year, we find that Q4’s top line, of $1.2 billion, was roughly flat year-over-year, and the company ran a net loss of $80.9 million.

At the same time, iQiyi’s reported non-GAAP operating loss margin of 7%, which was a large improvement from 4Q20.

What we have here is a company whose revenues are running flat – but whose operating efficiency appears to be improving.

That final point is the key for JPMorgan analyst Alex Yao. He writes in a recent note:

“We are positive on iQiyi’s path to OP breakeven in 2022 after its better-than-expected loss ratio in 4Q21 (-7%, vs. -14%/-13% in 3Q21/4Q20) and management’s 2022 OP breakeven target.

We expect further margin improvement in the next few quarters, driven by cost savings in content cost and opex, which should prove that iQiyi can operate as a self-sustaining business model and trigger further multiple re-rating for its share price.”

In line with his optimistic outlook, Yao upgraded his rating on IQ stock to Overweight (i.e. Buy), while also boosting the price target from $5 to $8. Should his thesis play out, a 12-month gain of ~87% could potentially be in the cards.

While JPM is bullish on this Chinese internet company, Wall Street generally is showing caution. The shares have 7 recent review, and these break down to 2 Buys, 4 Holds, and 1 Sell – for a Hold consensus view. The stock is selling for $4.80, and its $5.48 average target implies a one-year upside of 14%.

Source: Tip Ranks

https://www.tipranks.com/news/article/j ... =story_fri
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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