We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Baidu (BIDU) Q4 Earnings: Is Disappointment in Store?
Read MoreHide Full Article
Baidu, Inc. (BIDU - Free Report) is set to report fourth-quarter 2016 results on Feb 23. Last quarter, the company posted an impressive 47.13% positive earnings surprise.
Over the past one year, shares of Baidu underperformed the Zacks categorized Internet Services industry. While the industry gained 14.06%, the stock returned 9.79%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Baidu posted strong third-quarter results, with both the top and the bottom lines beating the respective Zacks Consensus Estimate.
Baidu’s growing presence in the online video market is likely to improve its competitive position. Also, the company’s strong dominance in the mobile search market and its consistent product development efforts remain positives. The company continues to strengthen its offerings through various agreements in China, where it is pitted against the country’s biggest e-Commerce operator, Alibaba Group Holding Limited.
However, increasing competition on its own search platform and higher expenses incurred from new investments could affect top-line growth in the to-be-reported quarter.
Also, for the fourth quarter, management expects revenues in the range of RMB17.840 billion ($2.675 billion) to RMB18.380 billion ($2.756 billion), representing a 4.6–1.7% year-over-year decrease.
Earnings Whispers
Our proven model does not conclusively show that Baidu will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 93 cents. Therefore, the company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Baidu has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Trinseo S.A. (TSE - Free Report) , with an Earnings ESP of +5.30% and a Zacks Rank #2.
Jack in the Box Inc. (JACK - Free Report) , with an Earnings ESP of +2.42% and a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Baidu (BIDU) Q4 Earnings: Is Disappointment in Store?
Baidu, Inc. (BIDU - Free Report) is set to report fourth-quarter 2016 results on Feb 23. Last quarter, the company posted an impressive 47.13% positive earnings surprise.
Over the past one year, shares of Baidu underperformed the Zacks categorized Internet Services industry. While the industry gained 14.06%, the stock returned 9.79%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Baidu posted strong third-quarter results, with both the top and the bottom lines beating the respective Zacks Consensus Estimate.
Baidu’s growing presence in the online video market is likely to improve its competitive position. Also, the company’s strong dominance in the mobile search market and its consistent product development efforts remain positives. The company continues to strengthen its offerings through various agreements in China, where it is pitted against the country’s biggest e-Commerce operator, Alibaba Group Holding Limited.
However, increasing competition on its own search platform and higher expenses incurred from new investments could affect top-line growth in the to-be-reported quarter.
Also, for the fourth quarter, management expects revenues in the range of RMB17.840 billion ($2.675 billion) to RMB18.380 billion ($2.756 billion), representing a 4.6–1.7% year-over-year decrease.
Earnings Whispers
Our proven model does not conclusively show that Baidu will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 93 cents. Therefore, the company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Baidu has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Baidu, Inc. Price and EPS Surprise
Baidu, Inc. Price and EPS Surprise | Baidu, Inc. Quote
Stocks to Consider
You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
WPX Energy, Inc. , with an Earnings ESP of +11.76% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Trinseo S.A. (TSE - Free Report) , with an Earnings ESP of +5.30% and a Zacks Rank #2.
Jack in the Box Inc. (JACK - Free Report) , with an Earnings ESP of +2.42% and a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>