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Should Value Investors Buy iQIYI (IQ) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is iQIYI (IQ - Free Report) . IQ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.09, while its industry has an average P/E of 23.67. IQ's Forward P/E has been as high as 15.42 and as low as 6.95, with a median of 10.76, all within the past year.

We should also highlight that IQ has a P/B ratio of 2.54. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. IQ's current P/B looks attractive when compared to its industry's average P/B of 2.77. Within the past 52 weeks, IQ's P/B has been as high as 3.92 and as low as 1.77, with a median of 2.80.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 1.01. This compares to its industry's average P/S of 1.56.

Finally, our model also underscores that IQ has a P/CF ratio of 3.43. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.40. 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 3.69.

These are just a handful of the figures considered in iQIYI's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that IQ is an impressive value stock right now.


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