Please ensure Javascript is enabled for purposes of website accessibility

Why iQIYI Stock Dropped Today

By Evan Niu, CFA - Updated Feb 18, 2021 at 1:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chinese tech company reported fourth-quarter earnings results.

What happened

Shares of iQIYI (IQ 14.82%) dropped by as much as 11% today after the company reported fourth-quarter earnings. The results were somewhat mixed compared to expectations, but the company is losing subscribing members.

So what

Revenue in the fourth quarter was 7.46 billion yuan ($1.1 billion), just shy of the 7.47 billion yuan that analysts were modeling for. That resulted in a net loss per American depository share (ADS) of 2.10 yuan ($0.32), which was better than the 2.21 yuan per ADS that the market was expecting iQIYI to lose. The Chinese technology company, which operates various online entertainment and social media platforms, said the total number of subscribing members had declined to 101.7 million, down from 106.9 million at the end of 2019.

Chinese woman using a laptop

Image source: Getty Images.

"We maintained our leading position in our key content offerings, including dramas and variety shows, based on third-party data," CEO Yu Gong said in a statement. "Meanwhile, we made breakthroughs in certain areas, such as original films, intelligent screens and Virtual Reality (VR)."

Now what

Guidance for the first quarter calls for revenue in the range of 7.07 billion yuan to 7.53 billion yuan ($1.08 billion to $1.15 billion). The midpoint of that forecast is mostly in line with the consensus estimate of 7.31 billion yuan.

"In 2021, we will continue to provide a more diversified portfolio of high-quality content to our users and enhance the perceived value of our paying subscribers," the chief executive added. "This, in our view, should help to revive the growth of our subscribers and revenue amid the recovering macro environment."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

iQIYI, Inc. Stock Quote
iQIYI, Inc.
$3.41 (14.82%) $0.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.