IQIYI Shares Slide After Q1 Earnings: What's Going On?

Shares of iQIYI Inc – ADR (NASDAQ:IQ) fell 7% to $1.73 on Wednesday following the release of its first-quarter earnings report.

What To Know: The Chinese streaming giant posted earnings of 4 cents per share, beating analyst expectations of 3 cents per share, but earnings were down 67% from 12 cents a year ago. Revenue came in at $990.3 million, topping estimates of $973.7 million, though this marked a 10% year-over-year decline.

The company's net income dropped sharply to $25.1 million from $655.3 million last year. Operating income also fell to $47.1 million, with a margin of 5%, down from 12% in the first quarter of 2024.

Revenue from membership services and advertising dropped 8% and 10%, respectively, while content distribution revenue plunged 32%. However, the other revenue segment rose 16% year-over-year.

Despite the decline, CEO Gong Yu highlighted strong sequential revenue and profit growth, and CFO Jun Wang noted improvements in the company's capital structure. The sharp decline in year-over-year earnings and revenue appeared to weigh heavily on investor sentiment during Wednesday trading.

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How To Buy IQ Stock

By now you're likely curious about how to participate in the market for iQIYI – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

In the case of iQIYI, which is trading at $1.69 as of publishing time, $100 would buy you 59.17 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, IQ has a 52-week high of $5.10 and a 52-week low of $1.50.