One-glance verdict
Undervalued
$17.84 our estimate vs market $0.90
Wall Street consensus: $1.35 (-92.5% lower than our fair-value estimate)
95% below our estimate, below the bear case
Fundamentals snapshot
iQIYI, Inc.
IQ · NMS · Communication Services · Entertainment
Current price
$0.90
52-week range
$0.81 - $2.30
Market cap
$869.78M
Balance sheet
Distressed
0.25x Concerning
Net debt $1.50B. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 5/10 years.
- Risk Return on equity was -6.7% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 4.5% to -1.7% over 3 years.
- Risk Insider ownership is only 0.3% (peer median: 5.2%).
What this company does
iQIYI, Inc.
iQIYI, Inc. is like a Chinese Netflix, offering a huge library of online videos, from TV shows and movies to short dramas, and it makes money mainly from people paying for memberships and from advertisers paying to show ads. This matters because the money it earns from these services, after covering its costs to create and license all that content, shows how healthy its business is.
How the company got here
iQIYI, Inc. started in 2009 as Qiyi.com, Inc., aiming to be a major player in China's burgeoning online video market. It was founded with the backing of Baidu, a leading Chinese search engine company, which provided crucial early support and resources. The company officially changed its name to iQIYI, Inc. in November 2017, reflecting its broader ambitions in the entertainment space. Over the years, iQIYI has grown by investing heavily in producing and licensing a wide variety of video content, from dramas and movies to variety shows and animations, becoming one of China's most popular online entertainment platforms.
What it actually does
iQIYI operates a massive online video platform in China, offering a vast library of entertainment content to its users. Think of it like a combination of Netflix and YouTube, but specifically for the Chinese market. They provide access to professionally produced shows and movies, much of which they create themselves or license from other studios. Beyond just watching videos, iQIYI also offers other digital entertainment services like online games and comics, aiming to be a one-stop shop for online fun.
Membership Services
This is a core part of iQIYI's business, where users pay a recurring fee to become members. For a monthly or annual subscription, members get access to a premium library of content, often including exclusive shows and movies that aren't available to non-paying viewers. They also typically enjoy an ad-free viewing experience and other perks, like early access to new episodes. This segment is a significant revenue driver, as it provides a predictable stream of income from dedicated fans.
Advertising Services
iQIYI also makes money by selling advertising space on its platform. This includes ads that play before or during videos for non-members, as well as more targeted brand promotions and performance-based advertising opportunities for companies looking to reach iQIYI's large audience. This segment is important because it allows the company to monetize its vast user base, even those who don't pay for a membership, by connecting advertisers with potential customers.
Content Distribution and Others
Beyond its own platform, iQIYI engages in distributing its content to other partners, earning revenue from licensing agreements. This segment also encompasses a variety of other smaller revenue streams, such as online mobile games, comic content, and talent agency services where they manage entertainers. These additional ventures help diversify iQIYI's income and leverage its existing intellectual property and industry connections.
What management is betting on now
iQIYI's management is focused on strengthening its core membership and advertising businesses by continuing to invest in high-quality, original content that attracts and retains viewers. They are also looking to expand their reach through innovative services and potentially new content formats, like micro-dramas and animations, to cater to evolving user preferences. The goal is to maintain their competitive edge in China's dynamic online entertainment landscape by offering a compelling and diverse entertainment experience.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$278.21M
FY2025 Q4
$1.43M
Revenue
$3.90B
Net income
$-29.50M
Diluted EPS
—
Operating cash flow
$15.13M
Free cash flow
$1.43M
Fetching…
Sources
Revenue
$4.00B
Net income
$104.68M
Diluted EPS
—
Operating cash flow
$289.07M
Free cash flow
$278.21M
Fetching…
Sources
Is it cheap or expensive?
Fair value $17.84 vs current price $0.90
Wall Street consensus is the average analyst price target: $1.35 (-92.5% lower than our fair-value estimate).
Our most-likely fair value is $17.84 a share — about 1,879.8% above today's price of $0.90, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $1.5B. Interest coverage 0.3x.
Net debt
$1.50B
Interest coverage
0.25x
iQIYI, Inc.'s profit covers its interest bill about 0.3 times over. which is stronger than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
IQ
BASELINE
iQIYI, Inc.
Total debt $2.12B Interest coverage 0.25x This is the baseline the peer rows are being compared against.
Total debt $3.44M Interest coverage -0.85x -100% vs IQ This peer has almost no interest-payment cushion compared with IQ.
Total debt $1.75B Interest coverage 1.49x +493% vs IQ Carries about 5.9x more debt cushion than IQ.
Total debt $402.74M Interest coverage -9.22x -100% vs IQ This peer has almost no interest-payment cushion compared with IQ.
Total debt $3.68M Interest coverage -7.43x -100% vs IQ This peer has almost no interest-payment cushion compared with IQ.
What you should know
The case for and against IQ
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 5/10 years.
Risks
-
Return on equity was -6.7% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 4.5% to -1.7% over 3 years.
-
Insider ownership is only 0.3% (peer median: 5.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
12.75x
P/B
0.46x
P/S
0.03x
EV/EBITDA
2.05x
PEG ratio
2.48x
Profitability
How much profit each dollar creates
Gross margin
17.9%
Operating margin
-1.7%
Net margin
-3.2%
ROE
-6.7%
ROA
-0.5%
Health
Liquidity and balance-sheet strength
Debt / equity
1.12x
Current ratio
0.45x
Quick ratio
0.32x
Total debt
$2.12B
Total cash
$618.44M
Growth
How the business has been compounding
Revenue TTM
$16.60B
Revenue 5Y CAGR
-5.0%
EPS TTM
-0.13
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$766.04M
Free CF TTM
$1.43M
FCF margin
0.0%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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