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Is Baidu (BIDU) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Baidu (BIDU - Free Report) is a stock many investors are watching right now. BIDU is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.18 right now. For comparison, its industry sports an average P/E of 20.79. Over the last 12 months, BIDU's Forward P/E has been as high as 17 and as low as 7.05, with a median of 12.47.

We also note that BIDU holds a PEG ratio of 0.64. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BIDU's PEG compares to its industry's average PEG of 1.23. Over the past 52 weeks, BIDU's PEG has been as high as 9.34 and as low as 0.34, with a median of 0.64.

Another valuation metric that we should highlight is BIDU's P/B ratio of 1.54. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 4.28. Over the past year, BIDU's P/B has been as high as 1.66 and as low as 0.85, with a median of 1.38.

Finally, our model also underscores that BIDU has a P/CF ratio of 11.22. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.49. Over the past 52 weeks, BIDU's P/CF has been as high as 49.26 and as low as 6.25, with a median of 12.09.

Trivago (TRVG - Free Report) may be another strong Internet - Services stock to add to your shortlist. TRVG is a # 2 (Buy) stock with a Value grade of A.

Shares of Trivago currently holds a Forward P/E ratio of 8.39, and its PEG ratio is 0.37. In comparison, its industry sports average P/E and PEG ratios of 20.79 and 1.23.

Over the last 12 months, TRVG's P/E has been as high as 24.73, as low as -4.45, with a median of 10.05, and its PEG ratio has been as high as 0.74, as low as -0.31, with a median of 0.47.

Furthermore, Trivago holds a P/B ratio of 0.91 and its industry's price-to-book ratio is 4.28. TRVG's P/B has been as high as 1.20, as low as 0.61, with a median of 0.83 over the past 12 months.

These are just a handful of the figures considered in Baidu and Trivago's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BIDU and TRVG is an impressive value stock right now.

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