Benchmark Co. analyst Fawne Jiang has maintained their neutral stance on IQ stock, giving a Hold rating today.
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Fawne Jiang has given his Hold rating due to a combination of factors that reflect both positive developments and ongoing challenges for Iqiyi. The company’s recent quarterly performance showed signs of stabilization, particularly with a slight recovery in membership revenue, and there is optimism about the upcoming quarter due to a stronger content lineup and favorable regulatory changes. However, despite these positive indicators, several segments, such as online advertising and content distribution, continue to face pressure, and the company posted a non-GAAP operating loss, which aligns with consensus expectations.
Looking ahead, the outlook for the fourth quarter appears promising with anticipated growth in membership and advertising revenues, driven by robust content offerings and overseas expansion. Nevertheless, the need for consistent execution and the competitive landscape present challenges that temper the potential for immediate stock upgrades. While there are catalysts for a sustained recovery, such as AI-driven efficiency gains and expanding global partnerships, the Hold rating reflects a cautious approach as the company navigates these opportunities and challenges in a dynamic market environment.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $2.10 price target.