Is iQIYI, Inc. (IQ) Stock Enjoying a Short Squeeze?

For the period that ended November 15, 2019, the short interest in iQIYI, Inc. (NASDAQ:IQ) stock is on the down. The 5.67% decline could be an indication that investors and traders expect a growth in the share price, often as a result of an advancement in the business’ fundamentals. The average brokerage opinion at 2.5 suggests acquiring these shares. Between October 31 and November 15, the total count of shorted shares totalled 52.86 million. That number was 3,175,243 less shares compared with the total of 56.04 million shares in the space of prior two weeks, which suggests more traders or funds are betting that the company stock will move up. The average daily volume for IQ at the November 15th settlement surged to 8,497,181, versus 3,611,135 at the October 31st report. That led days to cover to move at 6.221173, a 59.91% decrease compared to the 15.518023 days to cover recorded at the prior short interest data release.

On December 03, 2019, iQIYI, Inc. (NASDAQ:IQ) shares lost -0.61% or -0.12 points to close at $19.4 with a thin trading volume of 3.483 million shares. It opened the trading session at $18.84, the shares rose to $19.48 and dropped to $18.84, the range by which the price of stock traded the whole day. The company now has a market cap of $14.4 billion and currently has 743.42 million outstanding shares. iQIYI, Inc. (IQ) stock has accumulated 9.42 percent of market value in 21 trading days.

IQ stock’s trailing 3-year beta is 0, meaning there will be a lower rate of return, although posing a lower risk. The part of a firm’s profit given to each outstanding share of regular stock was -$2.21 share in the trailing 52 weeks. The stock’s value surged 30.46 percent year to date (YTD) compared to a decline of -4.48 percent in 52 week’s period. The firm’s shares are still trading -33.52 percent below its 1-year high of $29.18 and 35.19 percent up from 52-week low of $14.35. The average consensus ranking on the company is 2.5, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Past records have indicated that shares in iQIYI, Inc. declined on 4 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of IQ’s Q4 earnings on February 20. Analysts are predicting revenue to suffer decline of -4.7 percent to $995M in the financial fourth quarter, while EPS will soar by about -9.72 percent to -$0.65 per share. In the last quarter, it earnings of -$0.720288115246098 per share came worse than the -$0.384620848367758, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $1.05B, topping the $982.79M analysts had expected. Earnings are seen to rise by 15.8 percent this year, 36.2 percent in the coming year and the trend continues by 5.75 percent every year in the next 5 years.

The stock is lingering around the initial support level of $19. After this, the following support is at the zone of $18.6. Up until the time the IQ stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 60.85 on the daily chart, and this may be a cause for concern. In case the price goes below $18.6 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $19.64 level may cause a pull-back move approaching $19.88 mark.

The industry IQ deals with has an average P/E of 33.3. Its P/B ratio is standing at 8.3X compared to the 4.9 industry average. It is additionally sporting a 3.6 on the Price-to-Sales ratio, compared to the industry’s P/S average of 5.8. iQIYI, Inc. has a -8.5% gross profit margin, with its operating margin around -32.5%. Alongside this, the company’s net profit margin currently stands at -36.9%.