Analyzing Netflix (NFLX) and iQIYI (IQ)

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Netflix (NASDAQ: IQ) and iQIYI (NASDAQ:IQ) are both large-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Valuation & Earnings

This table compares Netflix and iQIYI’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Netflix $11.69 billion 11.80 $558.92 million $1.25 253.42
iQIYI N/A N/A N/A N/A N/A

Netflix has higher revenue and earnings than iQIYI.

Profitability

This table compares Netflix and iQIYI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Netflix 7.13% 25.66% 5.02%
iQIYI N/A N/A N/A

Institutional & Insider Ownership

76.3% of Netflix shares are owned by institutional investors. Comparatively, 11.5% of iQIYI shares are owned by institutional investors. 4.3% of Netflix shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Netflix and iQIYI, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Netflix 4 14 29 0 2.53
iQIYI 0 3 1 0 2.25

Netflix presently has a consensus price target of $348.36, suggesting a potential upside of 9.97%. iQIYI has a consensus price target of $28.67, suggesting a potential upside of 8.67%. Given Netflix’s stronger consensus rating and higher probable upside, equities analysts plainly believe Netflix is more favorable than iQIYI.

Summary

Netflix beats iQIYI on 9 of the 9 factors compared between the two stocks.

Netflix Company Profile

Netflix, Inc., an Internet television network, engages in the Internet delivery of television (TV) shows and movies on various Internet-connected screens. It operates in three segments: Domestic Streaming, International Streaming, and Domestic DVD. The company offers TV shows and movies, including original series, documentaries, and feature films. It offers members with the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. The company also provides DVDs-by-mail membership services. As of January 22, 2018, it had approximately 117 million members in 190 countries. Netflix, Inc. was founded in 1997 and is headquartered in Los Gatos, California.

iQIYI Company Profile

iQIYI, Inc., together with its subsidiaries, provides online entertainment services under the iQIYI brand name in China. It operates a platform that provides a collection of Internet video content, including professionally-produced content licensed from professional content providers and self-produced content. The company also operates movie theaters in China. In addition, it provides membership, content distribution, live broadcasting, and online gaming services. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is based in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu Holdings Limited.

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