Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 1 Oct, 24 | IQ | Buy | USD 2.86 | USD 3.09 | USD 3.29 | 1 day | 15.0% |
Data Powered by EOD Historical Data (“EODHD”).
iQIYI, Inc., together with its subsidiaries, provides online entertainment video services in the People's Republic of China. It offers various products and services, including online video, online games, online literature, animations, and other products. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also offers membership, online advertising, content distribution, and live broadcasting services. In addition, the company operates iQIYI Show, a live broadcasting platform that enables users to follow their favorite hosts and shows in real time through live broadcasting; and iQIYI Lite that offers an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu, Inc.
Enhanced Profitability: Net Margin of 8.4% in Q1 FY24 vs Industry Median of 2.2%
Increased Shareholders' Wealth: ROE of 5.3% in Q1 FY24 vs Industry Median of 0.3%
Lower Liquidity: Current Ratio of 0.60x in Q1 FY24 vs Industry Median of 0.95x
Balance Sheet Risk: Debt-Equity of 1.19x in Q1 FY24 vs Industry Median of 0.39x
Content Dependence, Profitability Concerns, Subscriber Churn, Technological Investments, Ad Revenue Dependency, International Expansion Risks, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 2.86 | 2.29 | 3.09 | 3.29 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Technical Indicator Analysis:
The stock price of IQ broke out of a significant resistance zone with robust volume, suggesting the potential for further upward movement in the near future. The 14-day Relative Strength Index (RSI) is trending upwards, reinforcing the positive outlook. Moreover, the stock is currently trading above both its 21-day and 50-day Simple Moving Averages (SMA), which strengthens the bullish sentiment.
As per the above-mentioned technical indicators analysis, a ‘Buy’ rating has been given to iQIYI Inc (NASDAQ: IQ) at the closing market price of USD 2.86 as of 30 September 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Communication Services Industry: Entertainment
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| IQ iQIYI Inc |
-0.15 5.36% | 2.65 | 16.34 | 2.16 | 0.12 | 2.37 | 0.17 | 0.31 |
| NFLX Netflix Inc |
5.08 0.70% | 726.84 | 44.85 | 36.10 | 7.99 | 13.09 | 8.21 | 12.88 |
| DIS Walt Disney Company |
1.47 1.59% | 93.98 | 70.56 | 19.42 | 1.88 | 1.68 | 2.24 | 16.46 |
| UNVGY Universal Music Group N.V |
0.06 0.46% | 13.02 | 40.46 | 27.47 | 4.82 | 18.29 | 5.11 | 28.19 |
| UMGNF Universal Music Group N.V. |
- -% | 25.97 | 40.11 | 27.55 | 4.82 | 18.30 | 5.11 | 28.19 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 30, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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