Back to top

Image: Bigstock

Baidu Inc. (BIDU) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

Baidu Inc. (BIDU - Free Report) closed the most recent trading day at $167.75, moving -0.64% from the previous trading session. This change lagged the S&P 500's 0.51% loss on the day.

Heading into today, shares of the web search company had gained 9.62% over the past month, outpacing the Computer and Technology sector's loss of 1.72% and the S&P 500's gain of 3.08% in that time.

Wall Street will be looking for positivity from BIDU as it approaches its next earnings report date. On that day, BIDU is projected to report earnings of $1.99 per share, which would represent a year-over-year decline of 33.67%. Our most recent consensus estimate is calling for quarterly revenue of $4.91 billion, up 18.16% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.35 per share and revenue of $19.39 billion, which would represent changes of -14.8% and +23.81%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BIDU. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. BIDU is currently a Zacks Rank #3 (Hold).

Digging into valuation, BIDU currently has a Forward P/E ratio of 20.23. For comparison, its industry has an average Forward P/E of 27.39, which means BIDU is trading at a discount to the group.

Meanwhile, BIDU's PEG ratio is currently 11.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Services stocks are, on average, holding a PEG ratio of 4.26 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 149, putting it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Baidu, Inc. (BIDU) - free report >>

Published in