Critical Survey: Lionsgate Studios (NYSE:LION) and iQIYI (NASDAQ:IQ)

Lionsgate Studios (NYSE:LION) and iQIYI (NASDAQ:IQ) are both communication services companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Analyst Ratings

This is a breakdown of current ratings for Lionsgate Studios and iQIYI, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lionsgate Studios	2	2	8	0	2.50
iQIYI	1	4	1	0	2.00

Lionsgate Studios presently has a consensus price target of $15.16, suggesting a potential upside of 24.77%. iQIYI has a consensus price target of $1.73, suggesting a potential upside of 87.80%. Given iQIYI’s higher possible upside, analysts plainly believe iQIYI is more favorable than Lionsgate Studios.

Earnings and Valuation

This table compares Lionsgate Studios and iQIYI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lionsgate Studios	$2.63 billion	1.37	-$198.30 million	($0.42)	-28.93
iQIYI	$3.80 billion	0.23	-$29.50 million	($0.12)	-7.68

iQIYI has higher revenue and earnings than Lionsgate Studios. Lionsgate Studios is trading at a lower price-to-earnings ratio than iQIYI, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

52.7% of iQIYI shares are held by institutional investors. 31.9% of Lionsgate Studios shares are held by insiders. Comparatively, 57.8% of iQIYI shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Lionsgate Studios has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, iQIYI has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lionsgate Studios	-4.10%	N/A	-0.44%
iQIYI	-3.24%	-6.29%	-1.78%

Summary

iQIYI beats Lionsgate Studios on 8 of the 14 factors compared between the two stocks.

About Lionsgate Studios

Lionsgate Studios Corp. engages in the provision of motion picture and studio operations that bring a varied portfolio of entertainment to consumers. The company is headquartered in Santa Monica, CA.

About iQIYI

iQIYI, Inc., together with its subsidiaries, provides online entertainment video services in the People's Republic of China. It offers various products and services, including online video, online games, online literature, animations, and other products. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also offers membership, online advertising, content distribution, and live broadcasting services. In addition, the company operates iQIYI Show, a live broadcasting platform that enables users to follow their favorite hosts and shows in real time through live broadcasting; and iQIYI Lite that offers an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. 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 headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu, Inc.