iQIYI Inc. [IQ] Stock trading around $6.79 per share: What’s Next?

iQIYI Inc. [NASDAQ: IQ] stock went on a downward path that fall over -4.50% on Friday, amounting to a one-week price decrease of less than -7.11%. The company report on March 7, 2023 that iQIYI Announces the Closing of Its Offering of US$600 Million Convertible Senior Notes due 2028 and Concurrent Repurchase of Convertible Senior Notes due 2026.

iQIYI, Inc. (Nasdaq: IQ) (“iQIYI” or the “Company”), a leading provider of online entertainment video services in China, today announced the closing of its offering (the “Notes Offering”) of US$600 million in aggregate principal amount of 6.50% convertible senior notes due 2028 (the “Notes”). The Notes bear interest at a rate of 6.50% per year, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, beginning on June 15, 2023. The Notes will mature on March 15, 2028, unless repurchased, redeemed or converted in accordance with the terms of the Notes prior to such date. The net proceeds of the Notes Offering (after deducting the initial purchasers’ discounts, taking into account the estimated reimbursement from the initial purchasers for certain expenses incurred by the Company, but without deducting other estimated offering expenses payable by the Company) amounted to approximately US$591 million. The Company intends to use the net proceeds from the Notes Offering for repayment and/or repurchase of the existing debt securities.

The Notes are senior and unsecured obligations of the Company. The Notes rank effectively junior to any of the Company’s secured indebtedness (including certain Company’s obligations related to the outstanding convertible notes due 2028) to the extent of the value of the assets securing such indebtedness. Holders of the Notes may not convert the Notes at any time on or prior to the 40th day following the last date of original issuance of the Notes (such date, the “Compliance Period End Date”). After the Compliance Period End Date and prior to the close of business on the business day immediately preceding September 15, 2027, the Notes will be convertible only if certain conditions are met. On or after September 15, 2027 until the close of business on the second scheduled trading day immediately preceding the maturity date, the Notes will be convertible at any time. Upon conversion, holders will receive cash, the American Depositary Shares, each representing seven Class A ordinary shares, with par value of $0.00001 per share, of the Company (the “ADSs”) or a combination of cash and ADSs, at the election of the Company. The Notes will initially be convertible at a conversion rate of 101.4636 ADSs per US$1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately US$9.86 per ADS and represents a conversion premium of approximately 27.5% above the Nasdaq closing price of the Company’s ADSs on February 28, 2023, which was US$7.73 per ADS. The initial conversion rate is subject to adjustment upon the occurrence of certain events. On March 16, 2026 or in the event of certain fundamental changes, the holders of the Notes will have the right to require the Company to repurchase for cash all or part of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

Over the last 12 months, IQ stock rose by 114.87%. The one-year iQIYI Inc. stock forecast points to a potential upside of 19.93. The average equity rating for IQ stock is currently 2.20, trading closer to a bullish pattern in the stock market.

The market cap for the stock reached $6.73 billion, with 869.15 million shares outstanding and 510.74 million shares in the current float. Compared to the average trading volume of 19.88M shares, IQ stock reached a trading volume of 19817462 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Guru’s Opinion on 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 $8.48 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 2.20. 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.

Goldman have made an estimate for iQIYI Inc. shares, keeping their opinion on the stock as Buy, with their previous recommendation back on March 06, 2023. While these analysts kept the previous recommendation, BofA Securities raised their target price from $4.70 to $9. The new note on the price target was released on March 02, 2023, representing the official price target for iQIYI Inc. stock. Previously, the target price had yet another raise from $2.80 to $5.10, while Morgan Stanley kept a Equal-Weight rating on IQ stock.

The Average True Range (ATR) for iQIYI Inc. is set at 0.51, with the Price to Sales ratio for IQ stock in the period of the last 12 months amounting to 1.60. The Price to Book ratio for the last quarter was 6.53, with the Price to Cash per share for the same quarter was set at 1.16.

IQ Stock Performance Analysis:

iQIYI Inc. [IQ] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -7.11. With this latest performance, IQ shares dropped by -9.22% in over the last four-week period, additionally plugging by 103.29% over the last 6 months – not to mention a rise of 114.87% 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 44.97, with the RSI for the last a single of trading hit 38.81, and the three-weeks RSI is set at 49.09 for iQIYI Inc. [IQ]. The present Moving Average for the last 50 days of trading for this stock 6.87, while it was recorded at 7.04 for the last single week of trading, and 4.35 for the last 200 days.

Insight into iQIYI Inc. Fundamentals:

Operating Margin for any stock indicates how profitable investing would be, and iQIYI Inc. [IQ] shares currently have an operating margin of +4.53 and a Gross Margin at +23.03. iQIYI Inc.’s Net Margin is presently recorded at -0.47.

Return on Equity for this stock declined to -2.36, with Return on Assets sitting at -0.30.

iQIYI Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.50 and a Current Ratio set at 0.50.

IQ Stock EPS

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%.

iQIYI Inc. [IQ] Insider Position Details

There are presently around $1,651 million, or 68.40% of IQ stock, in the hands of institutional investors. The top three institutional holders of IQ stocks are: GOLDMAN SACHS GROUP INC with ownership of 25,325,277, which is approximately 25.094% of the company’s market cap and around 0.26% of the total institutional ownership; OASIS MANAGEMENT CO LTD., holding 23,529,411 shares of the stock with an approximate value of $159.76 million in IQ stocks shares; and BANK OF AMERICA CORP /DE/, currently with $157.35 million in IQ stock with ownership of nearly 4.413% of the company’s market capitalization.

Positions in iQIYI Inc. stocks held by institutional investors increased at the end of Wednesday and at the time of the Wednesday reporting period, where 97 institutional holders increased their position in iQIYI Inc. [NASDAQ:IQ] by around 44,663,324 shares. Additionally, 91 investors decreased positions by around 57,158,963 shares, while 38 investors held positions by with 141,265,188 shares. The mentioned changes placed institutional holdings at 243,087,475 shares, according to the latest SEC report filing. IQ stock had 47 new institutional investments in for a total of 21,619,963 shares, while 34 institutional investors sold positions of 36,707,100 shares during the same period.