JP Morgan slashes price target on iQIYI Inc. [IQ] – find out why.

iQIYI Inc. [NASDAQ: IQ] gained 7.04% on the last trading session, reaching $6.69 price per share at the time. The company report on January 3, 2023 that iQIYI Announces Closing of Private Placement of Convertible Notes to PAG.

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iQIYI, Inc. (Nasdaq: IQ) (“iQIYI” or the “Company”), a leading provider of online entertainment video services in China, today announced the closing of a private placement of US$500 million in secured convertible senior notes (the “Notes”) to PAGAC IV-1 (Cayman) Limited, an affiliate of PAG, an investment firm focused on the Asia Pacific region (the “Investor”). The Company entered into a definitive agreement with respect to the transaction in August 2022. With the closing of this investment, iQIYI will continue to enhance and expand its business operations, develop its original content, and improve its working capital.

The Notes may be convertible into the Company’s American depositary shares, each currently representing seven Class A ordinary shares of the Company, at the holder’s option and subject to the terms of the Notes, at an initial conversion rate of 216.9668 ADSs per USD1,000 principal amount of Notes, representing a conversion premium of 20% above the volume weighted average price of the 20 trading days by August 29, 2022.  The Notes bear an interest rate of 6% per annum and will mature on the fifth anniversary of the issuance date. Holders of the Notes have the right to require the Company to repurchase for cash all or part of their Notes, at a repurchase price equal to 120% and 130% of the principal amount of the Notes, on or shortly after the third anniversary of the issuance date and the fifth anniversary of the issuance date, respectively.

iQIYI Inc. represents 868.85 million in outstanding shares, while the company has a total market value of $5.00 billion with the latest information. IQ stock price has been found in the range of $6.17 to $6.695.

If compared to the average trading volume of 17.20M shares, IQ reached a trading volume of 15456576 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about iQIYI Inc. [IQ]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for IQ shares is $5.56 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on IQ stock is a recommendation set at 2.30. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

JP Morgan have made an estimate for iQIYI Inc. shares, keeping their opinion on the stock as Overweight, with their previous recommendation back on September 07, 2022. The new note on the price target was released on September 01, 2022, representing the official price target for iQIYI Inc. stock. Previously, the target price had yet another raise to $2.80, while Macquarie analysts kept a Underperform rating on IQ stock.

The Average True Range (ATR) for iQIYI Inc. is set at 0.54, with the Price to Sales ratio for IQ stock in the period of the last 12 months amounting to 1.17. The Price to Book ratio for the last quarter was 7.27, with the Price to Cash per share for the same quarter was set at 1.00.

Trading performance analysis for IQ stock

iQIYI Inc. [IQ] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 14.55. With this latest performance, IQ shares gained by 73.77% in over the last four-week period, additionally plugging by 82.79% over the last 6 months – not to mention a rise of 35.98% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for IQ stock in for the last two-week period is set at 70.75, with the RSI for the last a single of trading hit 71.00, and the three-weeks RSI is set at 69.83 for iQIYI Inc. [IQ]. The present Moving Average for the last 50 days of trading for this stock 3.80, while it was recorded at 6.28 for the last single week of trading, and 3.68 for the last 200 days.

iQIYI Inc. [IQ]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and iQIYI Inc. [IQ] shares currently have an operating margin of -14.66 and a Gross Margin at +9.95. iQIYI Inc.’s Net Margin is presently recorded at -20.26.

Return on Equity for this stock declined to -86.10, with Return on Assets sitting at -13.68.

iQIYI Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.30 and a Current Ratio set at 0.40.

iQIYI Inc. [IQ]: An earnings per share (EPS) analysis

The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for IQ. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for iQIYI Inc. go to -1.18%.

An analysis of insider ownership at iQIYI Inc. [IQ]

There are presently around $1,693 million, or 68.40% of IQ stock, in the hands of institutional investors. The top three institutional holders of IQ stocks are: OASIS MANAGEMENT CO LTD. with ownership of 23,529,411, which is approximately New of the company’s market cap and around 0.29% of the total institutional ownership; BANK OF AMERICA CORP /DE/, holding 22,194,955 shares of the stock with an approximate value of $148.48 million in IQ stocks shares; and GOLDMAN SACHS GROUP INC, currently with $135.44 million in IQ stock with ownership of nearly 0.183% of the company’s market capitalization.

Positions in iQIYI Inc. stocks held by institutional investors increased at the end of March and at the time of the March reporting period, where 83 institutional holders increased their position in iQIYI Inc. [NASDAQ:IQ] by around 62,900,220 shares. Additionally, 82 investors decreased positions by around 35,086,667 shares, while 36 investors held positions by with 155,037,431 shares. The mentioned changes placed institutional holdings at 253,024,318 shares, according to the latest SEC report filing. IQ stock had 21 new institutional investments in for a total of 31,686,067 shares, while 26 institutional investors sold positions of 5,833,120 shares during the same period.

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