Analyzing Upwork (NASDAQ:UPWK) and iQIYI (NASDAQ:IQ)

iQIYI (NASDAQ:IQ) and Upwork (NASDAQ:UPWK) are both small-cap communication services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Risk and Volatility

iQIYI has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, Upwork has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Institutional and Insider Ownership

52.7% of iQIYI shares are owned by institutional investors. Comparatively, 77.7% of Upwork shares are owned by institutional investors. 57.8% of iQIYI shares are owned by company insiders. Comparatively, 4.9% of Upwork shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
iQIYI	-2.61%	-4.72%	-1.36%
Upwork	13.81%	17.92%	8.54%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for iQIYI and Upwork, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
iQIYI	1	2	2	0	2.20
Upwork	1	9	3	0	2.15

iQIYI currently has a consensus price target of $2.55, suggesting a potential upside of 100.52%. Upwork has a consensus price target of $15.50, suggesting a potential upside of 69.21%. Given iQIYI’s stronger consensus rating and higher probable upside, research analysts plainly believe iQIYI is more favorable than Upwork.

Earnings & Valuation

This table compares iQIYI and Upwork”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
iQIYI	$3.80 billion	0.32	-$29.50 million	($0.10)	-12.70
Upwork	$787.78 million	1.44	$115.43 million	$0.81	11.31

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

Summary

Upwork beats iQIYI on 10 of the 14 factors compared between the two stocks.

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.

About Upwork

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally. The company’s work marketplace provides access to talent with various skills across a range of categories, including administrative support, sales and marketing, design and creative, and customer service, as well as web, mobile, and software development. Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting. The company’s work marketplace offers access to various functionalities for remote engagements with talent, including communication and collaboration, ability to receive talent invoices through their work marketplace, and payment protection. Its marketplace offerings include Upwork Payroll and Upwork Enterprise, as well as managed and escrow services. The company was formerly known as Elance-oDesk, Inc. and changed its name to Upwork Inc. in May 2015. Upwork Inc. was incorporated in 2013 and is headquartered in San Francisco, California.