Why IQIYI Inc (NASDAQ: IQ) Stock is a Buy

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IQIYI Inc (NASDAQ: IQ) is an innovative market-leading online entertainment service company in China. IQIYI's platform features highly popular original content, as well as a comprehensive library of other professionally-produced content, partner-generated content and user-generated content. IQIYI has been called the "Netflix of China" and like Netflix (NASDAQ:NFLX), the company creates its own original content and it charges subscribers a monthly fee for unlimited access to the entire advertisement-free video library, which is close to 200 new movies and series in 2018 alone. 

Moreover, IQIYI has a YouTube type channel that allows people to watch for free. With a free membership, viewers see advertisements during the videos they watch and this is one of the ways IQIYI makes its money. Although IQIYI (NASDAQ: IQ) reported a 3rd Quarter September 2018 loss of $0.63 per share on revenue of $1.0 billion, subscriber revenue still increased 78% over the third quarter of 2017. Total subscribers increased 89% year over year and revenue from the sale of online games and merchandise was up 157%. Revenue from original content licensing and distribution was up a whopping 220%. 

Although IQIYI Inc (NASDAQ: IQ) has competition like Netflix, Amazon Video, Hulu and Youtube, as long as it’s able to generate advertising and subscription revenue by tapping directly into China’s gigantic 802 million viewer market, we feel IQ Stock is currently undervalued at its current share price. The company said it expects fourth-quarter revenue of $943.5 million to $982.8 million when it reports on Jan 29th, 2019. We rate IQ Stock a Buy. 

Why Should You Trust Our Ratings? 

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