Strategic Investments and Content Expansion Drive Buy Rating for iQiyi Despite Revenue Challenges

Analyst Saiyi He of CMB International Securities maintained a Buy rating on Iqiyi (IQ – Research Report), reducing the price target to $2.60.

Saiyi He has given his Buy rating due to a combination of factors, primarily focusing on iQiyi’s strategic investments and future growth potential. Despite an anticipated decline in total revenue for the first quarter of 2025, iQiyi’s increased investment in mini-dramas is expected to enhance user engagement, positioning it as one of the top content categories on mobile platforms. This strategic focus is likely to gradually boost advertising revenue as the company improves its monetization infrastructure.
Furthermore, while the advertising segment has faced challenges due to macroeconomic uncertainties, the membership business remains robust with a forecasted growth in revenue. The launch of new quality dramas is expected to sustain this momentum. Additionally, the company’s content distribution segment has performed better than expected, driven by successful new releases. These factors, combined with stable operating margins, support the Buy rating despite a slight reduction in the target price.

In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a $2.60 price target.