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Will Baidu's (BIDU) Q4 Earnings Benefit From iQIYI Momentum?
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Baidu, Inc.’s (BIDU - Free Report) fourth-quarter 2020 results, which are scheduled to be released on Feb 17, are likely to be hugely benefited from its strong iQIYI segment.
With the acquisition of iQIYI, the company started offering online entertainment services. Further, it integrated the online video business of PPStream into iQIYI segment.
Notably, the segment became an integral division of Baidu as it has been driving the company’s membership services and online marketing revenues for a while now.
In the last reported quarter, iQIYI segment generated RMB 7.2 billion revenues, accounting for 25.5% of the company’s total revenues.
We believe, iQIYI’s self-producing, long-form videos series and Baidu's search plus feed ecosystem are expected to have continued impacting the segment’s performance positively in the fourth quarter.
Click here to know how the company’s overall fourth-quarter performance is likely to be.
Despite the ongoing macro headwinds in China, strength across iQIYI’s content portfolio and interactive ads is likely to have continued strengthening Baidu’s footprint in the country’s online video streaming market.
Additionally, the company’s deepened focus on bolstering its membership portfolio is likely to have contributed well to the segment’s top line in the soon-to-be-reported quarter.
Further, solid demand for the company-produced drama series, original movies and variety shows is expected to have benefited the segment’s fourth-quarter performance.
Moreover, the growing momentum across the company’s theatre-themed content portfolio is anticipated to have boosted subscriptions for iQIYI during the quarter under review.
Notably, iQIYI’s subscriber base stood at 104.8 million in third-quarter 2020, reflecting year-over-year growth of 7%. Of these subscribers, 99.5% was paid members.
We believe, this trend is likely to have continued in the to-be-reported quarter on the back of the above-mentioned facts.
Zacks Rank & Stocks to Consider
Currently, Baidu sports a Zacks Rank #1 (Strong Buy).
Long-term earnings growth rate for CrowdStrike, Workday and MACOM is currently pegged at 25%, 25.36% and 37%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will Baidu's (BIDU) Q4 Earnings Benefit From iQIYI Momentum?
Baidu, Inc.’s (BIDU - Free Report) fourth-quarter 2020 results, which are scheduled to be released on Feb 17, are likely to be hugely benefited from its strong iQIYI segment.
With the acquisition of iQIYI, the company started offering online entertainment services. Further, it integrated the online video business of PPStream into iQIYI segment.
Notably, the segment became an integral division of Baidu as it has been driving the company’s membership services and online marketing revenues for a while now.
In the last reported quarter, iQIYI segment generated RMB 7.2 billion revenues, accounting for 25.5% of the company’s total revenues.
We believe, iQIYI’s self-producing, long-form videos series and Baidu's search plus feed ecosystem are expected to have continued impacting the segment’s performance positively in the fourth quarter.
Click here to know how the company’s overall fourth-quarter performance is likely to be.
Baidu, Inc. Revenue (TTM)
Baidu, Inc. revenue-ttm | Baidu, Inc. Quote
Factors at Play
Despite the ongoing macro headwinds in China, strength across iQIYI’s content portfolio and interactive ads is likely to have continued strengthening Baidu’s footprint in the country’s online video streaming market.
Additionally, the company’s deepened focus on bolstering its membership portfolio is likely to have contributed well to the segment’s top line in the soon-to-be-reported quarter.
Further, solid demand for the company-produced drama series, original movies and variety shows is expected to have benefited the segment’s fourth-quarter performance.
Moreover, the growing momentum across the company’s theatre-themed content portfolio is anticipated to have boosted subscriptions for iQIYI during the quarter under review.
Notably, iQIYI’s subscriber base stood at 104.8 million in third-quarter 2020, reflecting year-over-year growth of 7%. Of these subscribers, 99.5% was paid members.
We believe, this trend is likely to have continued in the to-be-reported quarter on the back of the above-mentioned facts.
Zacks Rank & Stocks to Consider
Currently, Baidu sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader technology sector are CrowdStrike Holdings Inc. (CRWD - Free Report) , Workday, Inc. (WDAY - Free Report) and MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for CrowdStrike, Workday and MACOM is currently pegged at 25%, 25.36% and 37%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>