iQIYI, Inc. (NASDAQ:IQ) Trading: Do the Shorts Know Something You Don’t?

For the period that ended December 31, 2019, the short interest in iQIYI, Inc. (NASDAQ:IQ) stock is on the down. The 6.22% 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 December 13 and December 31, the total count of shorted shares totaled 40.83 million. That number was 2,710,504 less shares compared with the total of 43.54 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 December 31st settlement retreated to 4,973,949, versus 5,277,822 at the December 13th report. That led days to cover to move at 8.209414, a 0.5% decrease compared to the 8.250319 days to cover recorded at the prior short interest data release.

In the recent trading session, iQIYI, Inc. (NASDAQ:IQ) shares gained 0.17% or 0.04 points to close at $23.94 with a thin trading volume of 3.318 million shares. It opened the trading session at $24.19, the shares rose to $24.22 and dropped to $23.77, the range by which the price of stock traded the whole session. The company now has a market cap of $17.8 billion and currently has 745.9 million outstanding shares. iQIYI, Inc. (IQ) stock has accumulated 20.28 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 -$2.24 share in the trailing 52 weeks. The stock’s value surged 13.22 percent year to date (YTD) compared to a rise of 31.61 percent in 52 week’s period. The firm’s shares are still trading -17.96 percent below its 1-year high of $29.18 and 58.33 percent up from 52-week low of $15.12. 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 -4.9 percent to $993M in the financial fourth quarter, while EPS will soar by about -11.11 percent to -$0.64 per share. In the last quarter, it’s earnings of -$0.720288115246098 per share came worse than the -$0.339028732330432, 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 11.7 percent this year, 34.9 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 $23.31. After this, the following support is at the zone of $22.72. 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 71.49 on the daily chart, and this may be a cause for concern. In case the price goes below $22.72 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $24.65 level may cause a pull-back move approaching $25.4 mark.

The industry IQ deals with has an average P/E of 36.72. Its P/B ratio is standing at X compared to the 5.73 industry average. 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%.