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JPMorgan has adjusted its price target for iQIYI (NASDAQ: IQ) with its new price target set at $2.50, a decrease from the previous $3.00, while the firm's stance on the stock remains Neutral.
The revision comes as analysts seek indicators of recovery that could lead to better growth prospects for iQIYI. Despite recognizing iQIYI's solid position in Identity and Access Management (IAM) markets and its growing exposure to Identity Governance and Administration (IGA) and Privileged Access Management (PAM), JPMorgan awaits stronger evidence of macroeconomic support and sales execution improvements.
In the last quarter, iQIYI experienced robust large-deal activity and gained better traction in the public sector. Industry and channel discussions also suggest a slight uptick in demand, and new product developments on the platform have been viewed positively.
Nonetheless, challenges in acquiring new logos are expected to persist in the near term, and there are no clear signs that the macro environment will substantially bolster customer growth or expansion within iQIYI's existing customer base, which relies on a seat-based model.
Looking ahead, JPMorgan anticipates another quarter of profitability exceeding expectations, as management continues to prioritize operating efficiency. However, concerns remain about the potential impact of slowing current Remaining Performance Obligations (cRPO), billings, and revenue growth.
In conclusion, while reaffirming a Neutral rating, JPMorgan sees a balanced risk-reward outlook for iQIYI. The firm has also set a December 2025 price target for iQIYI at $110, consistent with their December 2024 price target.
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