CMB International Securities analyst Saiyi He maintained a Buy rating on Iqiyi (IQ – Research Report) on February 19 and set a price target of $2.80.
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Saiyi He’s rating is based on a combination of factors that highlight the potential for iQiyi’s business recovery and growth. Despite a decline in revenue and operating income in 2024, the company has shown signs of recovery starting December 2024, primarily driven by the successful launch of several high-quality drama series. These new content offerings have bolstered iQiyi’s position in the drama market, leading to an increase in membership business.
Looking forward, the company anticipates a quarterly revenue growth in early 2025, supported by an increase in both membership and performance-based advertising revenues. Additionally, iQiyi plans to expand its portfolio of top-tier drama series and mini-dramas, aiming to enhance ad placement systems and boost ad inventory and revenue growth. Although the company faces margin pressures, improvements in operating margins are expected due to strategic cost controls and a rebound in the drama series segment, justifying the Buy rating given by Saiyi He.
In another report released on February 18, Citi also maintained a Buy rating on the stock with a $3.10 price target.