iQIYI, Inc. (NASDAQ: IQ)

Sector: Communication Services Industry: Entertainment CIK: 0001722608
Market Cap 1.78 Bn
P/B 0.95
P/E -32.55
P/S 0.47
ROIC (Qtr) 13.98
Div Yield % 0.00
Rev 1y % (Qtr) -7.77
Total Debt (Qtr) 2.07 Bn
Debt/Equity (Qtr) 1.11

About

iQIYI, Inc., a leading provider of online entertainment video services in mainland China, operates under the stock symbol IQ (NASDAQ). The company's primary business activities involve delivering high-quality content and user-friendly interfaces to its subscribers. Since its inception in 2010, iQIYI has grown rapidly, becoming a significant player in the Chinese entertainment industry. iQIYI's operations span across mainland China, where it provides premium video content, including original dramas, variety shows, movies, animations, and other entertainment...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 81.13M provides exceptional 91.17x coverage of minority interest expenses 889887.64, showing strong core operations.
  • Cash position of 555.99M provides exceptional 624.78x coverage of minority interest expenses 889887.64, indicating strong liquidity.
  • Robust free cash flow of 67.61M exceeds capital expenditure of 13.52M by 5x, indicating strong organic growth funding capability.
  • R&D investment of 238.47M represents healthy 0.41x of deferred revenue 576.93M, indicating strong future innovation pipeline.
  • Robust R&D investment of 238.47M at 0.45x of SG&A 532.70M demonstrates strong commitment to innovation and future growth.

Bear case

  • Operating cash flow of 81.13M barely covers its investment activities of (38.78M), with a coverage ratio of -2.09, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (38.78M) provide weak support for R&D spending of 238.47M, which is -0.16x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 81.13M provides insufficient coverage of deferred revenue obligations of 576.93M, which is 0.14x, raising concerns about future service delivery capabilities.
  • Long-term investments of 275.61M represent a high 1.45x of fixed assets 190.19M, indicating potential overexposure to financial assets versus operational capabilities.
  • Retained earnings of (6.18B) provide limited buffer against comprehensive income items of 197.75M, which is -31.26x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Entertainment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NFLX Netflix Inc 398.09 Bn 38.16 9.18 14.46 Bn
2 DIS Walt Disney Co 204.13 Bn 16.46 2.16 42.03 Bn
3 WBD Warner Bros. Discovery, Inc. 70.69 Bn 145.75 1.87 33.52 Bn
4 FWONA Liberty Media Corp 53.12 Bn -399.43 13.15 7.04 Bn
5 LYV Live Nation Entertainment, Inc. 33.40 Bn 103.67 1.36 9.39 Bn
6 FOXA Fox Corp 33.26 Bn 16.34 2.02 6.60 Bn
7 PSKY Paramount Skydance Corp 18.94 Bn -1,353.00 0.66 14.73 Bn
8 TKO TKO Group Holdings, Inc. 17.56 Bn 76.76 4.05 4.04 Bn

Industry comparisons

Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -65.26
EBIT Margin % EBIT Margin % (Qtr) 17.07 -79.53
EBT Margin % EBT Margin % (Qtr) -1.01 -82.47
Gross Margin % Gross Margin % (Qtr) 21.90 35.56
Net Profit Margin % Net Margin % (Qtr) -1.40 -83.18
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.08 0.60
Cash Payout Ratio Cash Payout Ratio 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 0.19 0.45
Current Ratio Curr Ratio (Qtr) 0.44 1.09
Debt to Equity Ratio Debt/Equity (Qtr) 1.11 1.01
Interest Cover Ratio Int Coverage (Qtr) 0.70 -38.17
Times Interest Earned Times Interest Earned (Qtr) 0.70 -38.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 1.38 -33.75
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 22.13 248.04
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.52
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -62.56 -100.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 -28.24
EBIT Growth (1y) % EBIT 1y % (Qtr) -75.24 -85.91
EBT Growth (1y) % EBT 1y % (Qtr) -118.16 24.10
EPS Growth (1y) % EPS 1y % (Qtr) -128.57 18.31
FCF Growth (1y) % FCF 1y % (Qtr) -77.37 118.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -23.97 30.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.03
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -17.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.73
Interest Coverage Int. cover (Qtr) 0.70 -38.17
Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets -0.02 1.53
EV to Cash from Ops. EV/CFO -1.48 25.10
EV to Debt EV to Debt -0.06 5.03
EV to EBIT EV/EBIT -1.32 165.24
EV to EBITDA EV/EBITDA -0.09 -156.71
EV to Free Cash Flow [EV/FCF] EV/FCF -1.78 72.07
EV to Market Cap EV to Market Cap -0.07 2.12
EV to Revenue EV/Rev -0.03 6.42
Price to Book Value [P/B] P/B 0.95 2.40
Price to Earnings [P/E] P/E -32.55 -114.33