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Baidu Inc. (BIDU) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, Baidu Inc. (BIDU) closed at $150.97, marking a +1.29% move from the previous day. This change outpaced the S&P 500's 1.22% loss on the day. Meanwhile, the Dow lost 0.19%, and the Nasdaq, a tech-heavy index, lost 0.53%.

Heading into today, shares of the web search company had gained 3.67% over the past month, outpacing the Computer and Technology sector's loss of 11.78% and the S&P 500's loss of 6.58% in that time.

Investors will be hoping for strength from Baidu Inc. as it approaches its next earnings release. On that day, Baidu Inc. is projected to report earnings of $1.89 per share, which would represent a year-over-year decline of 38.64%. Meanwhile, our latest consensus estimate is calling for revenue of $5.04 billion, up 8.6% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Baidu Inc.These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection remained stagnant. Baidu Inc. is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Baidu Inc. is holding a Forward P/E ratio of 19.11. For comparison, its industry has an average Forward P/E of 23.08, which means Baidu Inc. is trading at a discount to the group.

Meanwhile, BIDU's PEG ratio is currently 10.5. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Services industry currently had an average PEG ratio of 2.41 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 186, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow BIDU in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research