Datadog (NASDAQ: DDOG), Activision Blizzard (NASDAQ: ATVI), and Amazon.com (NASDAQ: AMZN) are some of the companies that will be making moves this month. Let’s see why these are stocks to watch in November.

Activision Blizzard: Nov. 6

Die-hard gamers can be fickle, and this isn’t Activision Blizzard at its best. Analysts are bracing for a 29% year-over-year plunge in quarterly revenue when it reports financial results on Thursday afternoon, with profits being slashed by more than half. Expectations are low, and recent tensions in China, where Activision Blizzard’s move to suspend a prolific esports personality for making comments in support of the Hong Kong protests polarized gamers and investors alike.

Investors will be hanging on for hope when it comes to guidance this week. The company rolled out Call of Duty: Modern Warfare — the latest installment of its combat franchise that peaked in 2011 — as well as Call of Duty: Mobile for smartphone players last month. Between the new releases and a better handle on the fallout from its esports suspension, any insight that Activision Blizzard offers on its near-term prospects will go a long way to dictating the stock’s direction.

Datadog: Nov. 12

The last few months have been rough for the IPO market. We’ve seen prolific offerings come undone before the opening bell, and even many of the big names to make it to the trading floor have buckled below their IPO prices. Investing in IPO stocks isn’t easy these days.

Datadog is one of the few recent debutantes to still have its head above water. The cloud monitoring and analytics specialist went public at $27 in mid-September, and it’s currently trading 28% higher.

The first big test for any IPO is its initial earnings report as a public company, and for Datadog that will come next week. It has a lot of growth momentum heading into next Tuesday’s report. Revenue nearly doubled last year, and it has risen almost 80% through the first half of 2019. With more large companies hopping onto the cloud and uptime reigning supreme, Datadog’s been growing its client base, and the same can be said for how much those customers are willing to pay for the platform’s crucial insight.

A strong report will keep the party going for Datadog, naturally. If things don’t go swimmingly — if the top line decelerates sharply or its impressive dollar-based net retention rate takes a breather — it wouldn’t be a surprise to see the stock become the latest broken IPO. It’s hard to regain the market’s confidence if you burn investors in your first earnings report as a public company.

Amazon.com: Nov. 22

The timing of this year’s Thanksgiving holiday is going to pinch some retailers. The holiday that officially kicks off the telltale shopping season is on the fourth Thursday of the month, and since it falls on Nov. 28 this time, it’s the latest possible start for a season that always ends on Christmas.

Amazon is trying to make its own luck. Instead of following the calendar into Black Friday on Nov. 29, the world’s largest online retailer is launching an eight-day Black Friday sale that starts a week earlier. Kicking off sales on Nov. 22 is brilliant, giving it a jump on the brick-and-mortar competition that’s already reeling from the e-tail challenge. With the company continuing to speed up its fulfillment and lowering the minimum for free shipping on Amazon-warehoused goods, things are shaping up nicely again during this crucial time of year.

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Amazon’s pedestrian 0.7% return over the past year is surprising. It’s not even keeping up with some of the better money market funds. Starting lines matter, naturally. The stock is up nearly 16% so far in 2019, but that follows a brutal holiday quarter last year during which it shed a quarter of its value. The fact remains that over the past 365 days, the stock has been on a round trip to essentially nowhere. At least one Wall Street pro thinks that things could be about to change.

Let’s go shopping

Goldman Sachs analyst Heath Terry feels that Amazon will deliver better-than-expected financial results when it delivers its third-quarter results next week. He sees a record number of physical retail stores closing as a sign that more shoppers are migrating online. He also feels that recent Amazon moves to speed up its already quick deliveries, the expansion of Amazon Web Services’ infrastructure and services, and improving momentum when it comes to online advertising will serve Amazon well in the coming quarters.

Some of these positive developments are coming at a price. The investments should eat into near-term operating profits. However, he feels that Amazon’s dominant market position will let it continue to command a market premium as a no-brainer quality growth stock. He is naturally sticking to his buy rating on the shares, and keeping Amazon on Goldman Sachs’ Conviction List of leading recommendations. He is slightly lowering his 12-month price target from $2,400 to $2,350, but that still represents a hearty 35% return. Given the stock’s flat performance over the trailing year, it would be the break that folks taking on the risk of holding Amazon have been waiting for.

Investors are already bracing for what could be a mixed report when Amazon announces its financial results a week from Thursday. They see net sales rising 21.6% to hit $68.8 billion, but squeezed margins will see the bottom line going the other way. Analysts see earnings per share falling to $4.57 from a $5.75 showing a year earlier. Amazon typically lands ahead of Wall Street’s profit targets, but it disappointed investors with a rare miss last time out.

After four consecutive years of accelerating top-line growth — clocking bursts north of 30% in back-to-back years — business is slowing again, but most retailers and even e-tailers would love to be checking in with better-than-20% growth and a juicy profit during the seasonally sleepy third quarter. It may seem that Amazon has fallen out of favor with the market as brick-and-mortar chains pick up the cadence on their online offerings. Even its once ballyhooed Prime Video platform is being nudged to the headline sidelines lately with new attractively priced streaming video platforms launching next month. But Amazon will do just fine. It’s been asleep at the wheel over the past year, but if it is about to deliver a bounce-back quarterly report next week, now would be a good time for the shares to wake up again.

The post Is Amazon Stock Ready to Break Out Again? appeared first on The Motley Fool Canada.

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If we were pitting Baidu (NASDAQ: BIDU) against MercadoLibre (NASDAQ: MELI) in the springtime of last year, it would be a monstrous battle of two international dot-coms seemingly at the top of their game. Baidu was China’s uncontested leader in search when the stock peaked just north of $284 in May of last year. MercadoLibre was thriving as Latin America’s online marketplace operator of choice when its shares hit fresh highs two months earlier.

The two stocks have gone their separate ways since then. Baidu shares have surrendered nearly two-thirds of their value, plummeting 65% since last year’s high. MercadoLibre stock has gone on to beat the market, soaring 72% if we draw the starting line the day that Baidu shares hit all-time highs. It’s clear which of the two stocks has momentum on its side, but let’s size up the two international internet icons to see which one is the better buy right now.

Betting on Baidu

Comparing MercadoLibre to Baidu these days may seem unfair. MercadoLibre revenue soared 102% on a constant currency basis in its latest quarter, translating into a 63% top-line surge for stateside investors on a reported basis. Growth has accelerated sharply in each of the past three quarters, but Baidu is going the other way.

China’s slowing economy and Baidu’s own miscues have weighed on the former market darling. Revenue has decelerated in three of the past four quarters, and last time out was a doozy. Revenue from continuing operations rose 6% in its latest quarter, and Baidu’s adjusted profit was cut by more than half.

MercadoLibre has its challenges in Latin America. Inflation and political unrest are par for the course, and the markets are so volatile that Argentina equities lost nearly half of their value in a single day this summer after surprising results in the country’s primary polls. The difference here is that MercadoLibre has been able to overcome the hurdles.

The silver lining for Baidu is that its stock — buckling again below triple digits on Tuesday — hasn’t been this cheap in ages when it comes to its top-line multiple. Baidu is now commanding an enterprise value that is 1.8 times its trailing revenue. MercadoLibre’s fetching a hefty 13.7 times its top-line results over the past four quarters.

Analysts have been paring back their profit targets for Baidu, but the stock is still going for a reasonable 15 times next year’s projected earnings. MercadoLibre is clocking in with a market cap that is 265 times next year’s expected profitability.

Baidu is in a funk, and the businesses accounting for its growth these days are properties including online video and artificial intelligence that will be tricky to monetize. MercadoLibre’s side gig — online payments platform Mercado Pago — is as popular as ever with $6.5 billion in total payment volume going through it in its most recent quarter. If you think that MercadoLibre is the obvious choice given all of Baidu’s warts, you’re not going to see the plot twist here.

Though both stocks should be able to beat the market at this point, I’m giving Baidu the nod here as the better buy. Latin America and China will eventually stabilize, but Baidu’s the one with the sorely depressed stock price and valuation. Baidu has always bounced back in the past after sharp corrections, and the world’s most populous nation will eventually get its economy back on track and get past its current U.S. trade tariff standoff. Betting on Chinese stocks isn’t very popular at the moment, but Baidu shares are too cheap to ignore here.

The post Better Buy: Baidu vs. MercadoLibre appeared first on The Motley Fool Canada.

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At least one Wall Street pro thinks that the recent sell-off for Roku (NASDAQ: ROKU) has run its course. Macquarie analyst Tim Nollen is upgrading shares of the streaming video pioneer on Wednesday, bumping his rating from neutral to outperform.

A cascading stock often finds firms boosting their ratings while sticking to or even lowering earlier price targets, but that’s not the case here. Roku shares have fallen a steep 39% since peaking last month, but Nollen’s still boosting his price goal on the stock from $110 — where it’s roughly at right now — to $130.

Nollen believes that Roku’s market leadership in the U.S. will translate well internationally, where the migration to connected TV is still early in the process. He sees Roku reaching more than 70 million active accounts by 2022, more than double the 30.5 million folks on its platform at the moment. With consumption and average revenue per user scaling higher, he sees platform revenue more than tripling to $2.3 billion come 2022, with overall revenue at $2.7 billion.

Starting lines matter

Arguing that Roku stock bottomed out when it briefly dipped into the double digits a few days ago is relative. The shares have corrected sharply since peaking at $176.55 exactly one month ago, but we’re comfortably ahead of where Roku was just before it posted blowout second-quarter results two months ago. The one-month chart is brutal, but Roku is still one of this year’s hottest stocks — up 252% so far in 2019.

It has been sneaking its way into a lot of growth-stock portfolios, once they overcome their initial instincts about the company’s business. Yes, Roku is the patent-rich company that hit the market first with the once-clunky boxes that would plug into your TV to provide access to what was originally a limited number of streaming offerings. It wasn’t until video game consoles with video-streaming access that the niche went mainstream. And these days, most people think of video game systems and the tech giants with subsidized hardware as the key players here. Reality is different than that perception, especially with Roku now inside TVs as the operating system of choice for television manufacturers.

Roku has evolved into a high-margin platform company, with its operating system delivering an average of more than three hours a day of streaming services to its 30.5 million active users. It still makes the hardware, but that’s not the growth driver here. Platform revenue has gone from 44% of total revenue in 2017 to 56% of the mix last year. Nollen’s 2022 projections translate into platform revenue commanding an 85% slice of Roku’s total revenue in three years.

The platform’s popularity is booming because Roku is agnostic. It doesn’t play the games that the tech giants are engaging in — i.e., steering consumers to their homegrown services at the expense of rival offerings that sometimes aren’t even available if the two parties are bickering. Roku offers thousands of services, and with some pretty hyped-up offerings hitting the market next month, it is again sitting pretty ahead of the holiday shopping season.

The stock will be volatile, and we may very well fall back into the double digits, where the shares were exclusively until this summer. But with momentum reaching a tipping point, one can make the odd-sounding remark that a stock that has already more than tripled in 2019 is bottoming out here.

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For the second time this week, an analyst is boosting his rating on Roku (NASDAQ: ROKU). Mark Mahaney at RBC Capital is lifting his call on shares of the streaming-video specialist from sector perform to outperform. He’s also jacking up his price target on Roku from $107 to $155, a new price goal that suggests 33% of upside from current levels.

Mahaney downgraded the stock more than three months ago, a move that may seem like a smart call given the brutal sell-off in the stock over the past few weeks, but Roku shares have actually moved 27% since his downgrade. Mahaney joins Tim Nollen at Macquarie, who also updated his previously neutral stance to an outperform position, along with a higher price target a day earlier. There’s no such thing as easy money out there, but it’s encouraging to see a stock get back-to-back days of upgrades after a brutal correction since peaking in early September.

The timing couldn’t be better

It’s always interesting to watch what Wall Street does in the weeks between a quarter’s end and when that company reports fresh financials. Analyst moves ahead of earnings season tend to be based on how they feel the market will react following a company’s financial release.

RBC’s Mahaney argues that the stock is more compelling following its recent 31% pullback, but that obviously wasn’t the case at the time of his early July downgrade. You can upgrade a stock based on a stock correcting, but when the price target gets sauced up, it’s a pretty bullish indicator. Mahaney sees Roku as one of the best ways for investors to play the streaming revolution, and he views the company’s fundamentals as some of the strongest among small-cap internet stocks.

Roku has been one of this year’s hottest growth stocks, nearly quadrupling in 2019. It won’t report until much later this earnings season. Its third-quarter results are unlikely to be announced until early November, or roughly four weeks from now.

A lot can naturally happen between now and then, but the narrative for Roku remains the same: It’s building its audience rapidly, up 39%, to 30.5 million accounts over the past year. The glut of new services rolling out in the coming months will only help increase Roku’s popularity as the platform that plays nice with all of the leading services.

Analysts probably don’t want to be caught with bearish or even neutral calls when Roku reports next month. Its last quarter was a stock-catapulting blowout, and there’s no reason to think that folks aren’t leaning on their Roku systems more than ever. As bad a beating as the stock took over the past month, it wouldn’t be a surprise to see it inch higher leading into its third-quarter update.

The post Roku Stock Scores Another Wall Street Upgrade appeared first on The Motley Fool Canada.

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Snapchat parent Snap (NYSE: SNAP), burger chain Shake Shack (NYSE: SHAK), and used-car retailer Carvana (NYSE: CVNA) are some of the more intriguing names that have seen their stocks more than double this year. Let’s go over why the market’s betting big on all three of these growth stocks.

Snap: up 164%

Social media’s biggest winner was one of last year’s ugliest disappointments. Snapchat parent Snap has overcome a 2018 that was marred by a poorly received app update, a wearable-tech failure, languishing platform growth, and a stock that tumbled after the company failed to be the comeback kid.

Then revenue soared 48% in a blowout performance, a rare sight of acceleration for a social media platform that seemed to be peaking last year. There are now 203 million daily active users using Snapchat, and its aptitude for monetization continues to improve. Snap is making the most of its largely young audience, and it seems to have a strong pulse on the hot and engaging social trends.

Shake Shack: up 108%

There’s only one restaurant stock that’s more than doubled in 2019, and it’s the one that many investors felt was overvalued when the year began. How do you like them burgers, Shake Shack bears? The high-volume chain specializing in fresh burgers, crisp crinkle-cut fries, frozen custard milkshakes, and more recently boneless fried chicken is rolling these days.

Revenue climbed 31% in the second quarter, as brisk expansion and a 3.6% uptick in comps are fueling the top-line surge. The news was even better on the bottom line, as Shake Shack’s profit smoked Wall Street expectations — something it’s easily done in all but one of the past four quarters.

Shake Shack also boosted its guidance, and its growing status as a cult favorite is helping. So are third-party apps that offer restaurant operators a new way to beef up takeout orders, with someone else taking on the burden of fulfillment.

The stock itself hasn’t gotten any cheaper in 2019. It trades at 6 times trailing revenue, and that’s a steep valuation for stocks in general but particularly so for the restaurant industry. Even if we look out to 2020, we find the stock fetching more than 120 times that year’s projected earnings. Shake Shack has never been a cheap stock, but its improving fundamentals are helping it overcome valuation concerns.

Carvana: up 107%

Used cars aren’t glamorous, but Carvana’s penchant for showmanship and customer-friendly policies is making it a hot ride in 2019. The auto retailer chain, with its glass-enclosed multi-level vending machines filled with secondhand late-model cars, has posted triple-digit revenue gains — yes, that’s top-line growth north of 100% — for 22 consecutive quarters. Rapid expansion and growing brand awareness are helping prop up revenue, but things still look good once you pop the hood.

Carvana is getting better about its markups. Total gross profit per vehicle has risen from $2,173 to $3,175 over the past year. Losses continue, though, and on that front we see that Carvana’s red ink has come in heavier than analysts were forecasting in all but one quarter over the past year. Investors are giving Carvana a pass, given its stellar revenue growth, but the shares will be volatile until the fast-growing auto retailer turns the corner of profitability.

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The good news for beleaguered Lyft (NASDAQ: LYFT) and Uber (NYSE: UBER) investors is that an analyst is initiating coverage of the ride-hailing duopoly. The bad news is that MKM Partners is rolling out coverage with neutral ratings on both stocks. MKM Partners is slapping a price target of $32 on Uber and $45 on Lyft.

The new price goals are much lower than each stock’s IPO price. Uber went public at $45 in May. Lyft hit the market at $72 two months earlier. Thankfully for investors thinking about initiating a position in one or both companies, the new analyst price targets offer some implied upside from current levels, with both stocks hitting new all-time lows on Wednesday. MKM Partners’ price goals are 10% ahead of where Uber closed on Wednesday and 17% above where Lyft is currently perched.

At a time when there has been little to get excited about either company for existing shareholders, this will have to do as a relative positive development.

Losing money as ridership grows

Timing is the key to investing in IPOs, and it’s fair to say that Uber and Lyft could’ve been market darlings had they gone public a year ago, or maybe two years from now. The two companies that dominate the personal mobility app market are in an undeniably growing niche, and even as growth understandably decelerates, they are both cranking out hearty double-digit revenue gains.

Bookings soared 31% in Uber’s latest quarter, and Lyft is growing even faster. The 72% top-line pop that Lyft posted in the second quarter was more than what any of the 30 analysts covering the stock were expecting. Both companies are losing a lot of money, and that is why the market has kicked both stocks to the curb. It’s just not fashionable to go public without a clear path to profitability, and the same process that shelved the WeWork IPO last month is also weighing on the 2019 debutantes that managed to sneak in under the wire.

None of this suggests that Uber and Lyft are perfect. Uber’s revenue and net adjusted revenue are running at less than half of its gross bookings rate as it shells out more money to its drivers to keep them incentivized. Lyft doesn’t have the same profit-mauling ventures like Uber Eats or the push to move its mobility app overseas, but Uber’s smaller rival is still years away from turning the corner on the bottom line.

California is also about to make things harder for Lyft and Uber by requiring them to reclassify drivers as employees instead of independent contractors as early as next year, a move that will either force rates in the country’s largest state higher or dig the ridesharing duo into a bigger deficit hole.

In a different investing climate, growth investors would be eyeing the booming popularity of the platforms favorably and betting on the transportation industry’s disruption. Right now, it’s just a matter of exhaling when an analyst initiates coverage and simply settles for a neutral rating.

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Sonos (NASDAQ: SONO), Zuora (NYSE: ZUO), and Tanger Factory Outlet Centers (NYSE: SKT) are three dynamic small-cap stocks priced attractively to beat the market. Let’s take a closer look at each of them to see why they’re among the top stocks to buy in October.

Sonos

It’s been a little more than a year since the wireless speaker pioneer went public at $15, and it currently trades below that price. The stock falling out of favor may seem to make sense at first. Tech giants have flooded the market with cheap and often subsidized virtual assistants that double as low-end wireless speakers. How can little Sonos stand out when the big kids are playing?

Well, Sonos is holding up a lot better than you probably think. Revenue is on pace to deliver double-digit percentage growth in 2019, stretching its streak of positive growth to 14 years. Sonos is still on the cutting edge. It teamed up with IKEA to launch a new line of bookshelf speakers and table lamps that double as speakers this summer. Sonos also recently introduced its first portable battery-operated Bluetooth speaker. The 25% top-line surge that Sonos posted in its fiscal third quarter is a fluke, but this remains a growing high-end leader that is somehow trading as a broken IPO despite doing so many things right in its rookie season.

Zuora

We live in the golden age of subscription services, and Zuora’s cloud-based tools arm platforms with the support they need to  to run their businesses. Zuora works with new- and old-school companies, enhancing their subscription-based offerings.

Zuora’s clicking with its clients. Revenue rose 21% in its latest quarter, and it now has 566 different accounts generating $100,000 or better on an annualized basis. The platform is sticky, as the dollar-based retention rate is clocking north of 100% (107% if you wish to be precise). Zuora is still in the red on a reported and adjusted basis, but it’s coming off back-to-back quarters of posting narrower-than-expected deficits. If you believe that subscription services are the future — and you would be right to believe that — Zuora is a name that should come first even if alphabetically speaking it may be at the end.

Tanger Factory Outlet Centers

The mall may be dying, but trend watchers and income investors could find themselves all landing on Tanger Factory Outlet Centers as a worthwhile investment. Unlike traditional mall REITs that find themselves to be at the mercy of consumers finding better deals online, Tanger’s chain of factory outlet malls smoke out the deal seekers. Saving money is always fashionable, and it’s going to be a good place to be if the economy hits a hiccup or two in the near future.

Tanger’s current yield of 9.4% is juicy, and possibly even sustainable in the near term after it boosted its adjusted funds from operations forecast in its latest quarterly report. With an increase in traffic and tenant sales and an occupancy rate of 96% for its consolidated portfolio, Tanger offers a somewhat defensive way for income investors to play the mall REIT market.

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Some of the current losers of this year’s rookie class will recover, but many of them won’t. Peloton joins Jumia (NYSE: JMIA) as two of 2019’s IPOs that don’t seem likely to bounce back in the year ahead. Let’s go over the challenges that will make it hard to fix some of 2019’s broken offerings.

Peloton

There’s a certain level of schadenfreude in watching last week’s Peloton offering fail. Who has $2,245 for a basic Peloton bike or nearly double that ransom for a treadmill? Why pay $39 a month for a subscription to make the most of the connected-fitness nature of the big-ticket workout gear?

In Peloton’s defense, a lot of people are flocking to its high-end fitness platform and sticking around. Revenue more than doubled in fiscal 2019, up 110% to hit $915 million. Once you make the costly investment to hop on the Peloton ecosystem, you tend to stay given the company’s 95% retention rate over the past year. There are 511,202 Peloton subscribers as of the end of June, with the average net monthly churn rate clocking in at a healthy 0.65%.

The rub for Peloton is that there is a ceiling as to how many people are willing to fork over thousands for in-home gear, an important part of the revenue mix since hardware sales account for 79% of its top-line results. Subscription revenue will be the driver eventually, but with so many gym memberships now running at lower price points, the value proposition that Peloton offers will continue to have a limited addressable market.

Jumia

There was plenty of hype when the leading online marketplace in Africa hit the market at $14.50 per share in early April. Investors thinking that they were buying into the MercadoLibre of Africa — at a time when the Latin American marketplace operator was one of the hottest stocks on the planet — jumped on the offering. Jumia shares would go on to more than tripleÂa few days later. Naturally, it has given back all of those early gains.

A closer look at Jumia’s business and the unique infrastructure and consumer acceptance challenges in the region it operates makes it easy to see why the company failed to live up to the hype. Jumia’s business is definitely growing. Revenue rose 58% in its latest quarter, and its active customer count has risen from 3.2 million to 4.8 million over the past year. It’s another story on the way down the income statement, with Jumia’s operating deficit widening and analysts bracing for annual losses through at least 2023.

There is long-term potential in the African continent, but it’s years away from becoming a reality. Right now Jumia is facing fulfillment challenges given rudimentary address systems, a lack of social acceptance for online payment platforms, and the fact that less than 1% of Africa’s sales are currently being satisfied online. It also didn’t help that Jumia has had to tackle corruption, with some of its independent sales consultants accused of engaging in improper sales practices. The company has the potential to be a market-beating investment in a few years, but it’s nowhere close to proving that to be the case right now.

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Despite being the leaders in a booming niche, iQiyi and Netflix aren’t the hot stocks they were last summer. Although both stocks peaked in June of last year, shares of iQiyi and Netflix have gone on to plummet 65% and 38%, respectively. Each company has unique concerns right now, but both are compellingly priced given their leadership roles in a market that’s only trending higher in usage. Let’s see which of the two out-of-favor stream queens deserves to be royalty in your portfolio.

Stream control

With Netflix weighing in at a market cap of roughly $115 billion and iQiyi at less than $13 billion, the latter may seem to offer investors more bang for their brokerage buck. If Netflix has just a little more than 50% of the paying subscribers iQiyi does but is selling at 10 times the price, is this a battle even worth debating? Yes. There is more to this bout than subscriber counts.

iQiyi premium accounts are paying a lot less than Netflix’s worldwide average. In fact, when you add up all of iQiyi’s revenue — since membership revenue accounts for half of its business, as it’s also available as an ad-supported platform for freeloaders and engages in content distribution — the $3.9 billion that it has recorded over the past four quarters is less than a quarter of the $17.6 billion in revenue that Netflix has racked up in the same period.

Netflix is also profitable, something that analysts don’t see happening at iQiyi until 2022 at the earliest. A lack of profitability and China’s tightly regulated ways are weighing on iQiyi’s stock these days. Revenue growth has also decelerated sharply at iQiyi.

Another factor keeping iQiyi as a broken IPO is that investors are mostly steering clear of Chinese growth stocks as the trade tariff war with the U.S. plays out. It can be argued that iQiyi’s model itself is relatively immune to the actual trade fisticuffs, but with China’s economy slowing as a result of the discord, folks are staying away from consumer discretionary stocks in the world’s most populous nation.

Netflix also has its challenges. The stock is being held back by a glut of big-name competition that will be launching in the coming months, with its two largest rivals coming to market in November at far more aggressive pricing than analysts were expecting. Netflix is starting to seem pricey as a service relative to the new platforms. It also doesn’t help that Netflix fell well short of its second-quarter subscriber growth guidance this summer. It reports again in a few weeks.

And the winner is…

I own Netflix, and I’ve been vocally supportive of iQiyi. I think both stocks will beat the market off of today’s depressed prices. However, given the near-term challenges for Netflix and the high ceiling for the faster-growing Chinese company, I’m going to go with iQiyi as the better buy here.

The post Better Buy: iQiyi vs. Netflix appeared first on The Motley Fool Canada.

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