What happened Shares of iQIYI (NASDAQ: IQ) slumped on Tuesday after the Chinese streaming company reported its third-quarter results. While iQIYI beat analyst estimates across the board, a decline in subscribers and weak guidance sent the stock down 15.4% by 11:45 a.m. EST. So what iQIYI reported third-quarter revenue of $1.1 billion down 3% year over year and $20 million higher than the average analyst estimate. Earnings per American depositary share came in at a loss of $0.24; analysts were expecting the per-share loss to be $0.17 bigger. Image source: Getty Images. Membership services revenue was up 7% to $585.5 million, but online advertising service revenue slumped 11% to $271 million, and content distribution revenue plunged 42% to $57.8 million. The company had 104.8 million subscriber members at the end of the quarter, down from 105.8 million one year ago. "In the coming quarters, we may continue to see fluctuations in the number of subscribers, driven by the normalization of user behavior and content pipeline," said iQIYI CEO Yu Gong. Now what For the fourth quarter, iQIYI expects to generate revenue between $1.07 billion and $1.14 billion. That guidance range represents a year-over-year change between negative 3% and positive 3%. iQIYI has a lofty valuation: The company was valued at nearly five times sales prior to Tuesday's plunge. With revenue not growing, and with the bottom line in the red, investors were reevaluating whether the stock deserves such a premium valuation on Tuesday. 10 stocks we like better than iQiyiWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and iQiyi wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends iQiyi. The Motley Fool has a disclosure policy.Source