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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
iQIYI (IQ - Free Report) is a stock many investors are watching right now. IQ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that IQ has a P/B ratio of 2.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3. IQ's P/B has been as high as 7.36 and as low as 1.75, with a median of 2.92, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. IQ has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.2.
Finally, investors will want to recognize that IQ has a P/CF ratio of 3.20. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. IQ's P/CF compares to its industry's average P/CF of 12.67. Within the past 12 months, IQ's P/CF has been as high as 10.13 and as low as 2.44, with a median of 4.04.
Value investors will likely look at more than just these metrics, but the above data helps show that iQIYI is likely undervalued currently. And when considering the strength of its earnings outlook, IQ sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy iQIYI (IQ) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
iQIYI (IQ - Free Report) is a stock many investors are watching right now. IQ is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.
We should also highlight that IQ has a P/B ratio of 2.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3. IQ's P/B has been as high as 7.36 and as low as 1.75, with a median of 2.92, over the past year.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. IQ has a P/S ratio of 0.89. This compares to its industry's average P/S of 1.2.
Finally, investors will want to recognize that IQ has a P/CF ratio of 3.20. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. IQ's P/CF compares to its industry's average P/CF of 12.67. Within the past 12 months, IQ's P/CF has been as high as 10.13 and as low as 2.44, with a median of 4.04.
Value investors will likely look at more than just these metrics, but the above data helps show that iQIYI is likely undervalued currently. And when considering the strength of its earnings outlook, IQ sticks out at as one of the market's strongest value stocks.