Investing

Earnings Previews: Baidu, iQiyi, Palantir

Second-quarter revenue is forecast to drop by about 5.5% sequentially to $1.15 billion. That’s 9.5% higher than second-quarter 2020 revenue. iQiyi is expected to post an adjusted loss per share of $0.28, three cents worse sequentially, and flat year over year. For the full fiscal year, analysts expect a loss per share of $1.09 on an 8.8% increase in revenue to $4.95 billion.

iQiyi is not expected to return a profit in 2021, 2022 or 2023. The stock currently trades at 1.9 times its enterprise value-to-sales (EV/S) ratio. That ratio is estimated at 1.7 in 2022 and 1.5 in 2023. The stock’s 52-week trading range is $10.33 to $28.97, and the company does not pay a dividend.

Palantir

Intelligence software maker Palantir Technologies Inc. (NYSE: PLTR) has posted a share price increase of about 144% since its October 2020 IPO. Since peaking in late January, thanks to the meme stock run-up, shares trade down more than 40%. They dropped more than 12% in July, more than competitor Verint and sharply more than share price gains at both Splunk and Cognizant.

Cathie Wood’s ARK Innovation ETF and ARK Next Generation Internet ETF hold a combined total of about 26.7 million shares of Palantir stock, valued at around $611.7 million.

Just nine brokerages cover the stock, and only one has a Buy rating on it, while another five rate the stock a Hold. At a price of around $23.50, the shares have outrun their median price target of $20. At the high price target of $28, the upside potential is about 19%.

Analysts expect Palantir to report second-quarter revenue of $361.1 million, up 5.8% sequentially. EPS are forecast to come in at $0.03, down a penny sequentially. For the full year, EPS are expected to total $0.15, down nearly 22% year over year. Revenue is expected to rise 35.6% to $1.48 billion.

Shares trade at 151.0 times expected 2021 EPS, 105.3 times estimated 2022 earnings and 77.9 times estimated 2023 earnings. The stock’s 52-week range is $8.90 to $45.00. Palantir does not pay a dividend.