Skip to main content

Market Overview

Chinese Streaming Service iQIYI Has Subscription Revenue Opportunity, Oppenheimer Says In Bullish Initiation

Chinese Streaming Service iQIYI Has Subscription Revenue Opportunity, Oppenheimer Says In Bullish Initiation

iQIYI Inc (NASDAQ: IQ) is among the largest video streaming service providers in China, and investors seem to be underestimating its ability to lift subscription fees, according to Oppenheimer.

The iQIYI Analyst

Bo Pei initiated coverage of iQIYI with an Outperform rating and $23 price target.

The iQIYI Thesis

iQIYI has more than 450 million monthly average users and over 105 million paying subscribers, Pei said in the Tuesday initiation note. (See his track record here.)

An Oppenheimer survey showed that 65% of respondents are willing to pay more for their video streaming subscriptions, the analyst said. The company’s rivals are expected to focus on profitability and begin raising their average revenue per user, he said.

With a surge in viewership due to the coronavirus outbreak in China, iQIYI may record strong subscriber additions in the first quarter of 2020, Pei said.

While the company’s online advertising business may suffer due to advertisers delaying or canceling marketing campaigns, these impacts are only temporary, the analyst said.

Content cost as a percentage of revenue is likely to decline from 77% in 2019 to 70% in 2020 and 60% in 2021, boosting iQIYI's margins, according to Oppenheimer.

IQ Price Action

Shares of iQIYI were trading 2.93% higher at $17.94 at the time of publication Tuesday.

Related Links:

Luckin Coffee Fraud Has Shaken Investor Faith In US-Listed Chinese Companies, Long-Term Backer Citron Says

PreMarket Prep Stock Of The Day: Baidu

Latest Ratings for IQ

Apr 2021Credit SuisseUpgradesUnderperformNeutral
Feb 2021KeyBancUpgradesSector WeightOverweight
Jan 2021Credit SuisseDowngradesNeutralUnderperform

View More Analyst Ratings for IQ
View the Latest Analyst Ratings


Related Articles (IQ)

View Comments and Join the Discussion!

Posted-In: Bo Pei Citron Research OppenheimerAnalyst Color Short Sellers Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

CLVSHC Wainwright & Co.Maintains12.0
PDDDaiwa CapitalInitiates Coverage On180.0
RYAMRBC CapitalDowngrades11.0
XOMDZ BankUpgrades67.0
BWFGKeefe, Bruyette & WoodsUpgrades35.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at