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Baidu, Inc. Message Board

  • livyisgod livyisgod Nov 9, 2007 12:34 PM Flag

    look at the fundamentals


    Trailing P/E (ttm, intraday): 165.76
    Forward P/E (fye 31-Dec-08) 1: 85.32
    PEG Ratio (5 yr expected): 2.72
    Price/Sales (ttm): 62.80
    Price/Book (mrq): 50.75
    Enterprise Value/Revenue (ttm)3: 61.81
    Enterprise Value/EBITDA (ttm)3: 156.517

    and tell me how cheap bidu is now. Bidu forward PE = 85 !!!!!!!!!!! Goog forward PE = 32

    Let's assume that Bidu is growing at twice the rate of Goog. then bidu PE should be around 65-70. That means it has to drop another 20 percent!!!!

    BIDU AT 270 = GOOD BUY.

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    • Good points but BIDU is expected to grow 75% per year for the next five years, compared to GOOG growing "only" 35%. That means in 5 years, BIDU revenues could be 16x what they are today while GOOG will only grow 4.4X. I think that the BIDU growth estimate is low as the Chinese consumers are becoming a force to recon with (held back mostly by their government.)

      If we use the 16x as valid, then BIDU would earn $32 in 2012 so the stock is trading at a PE of 11x for that future year. Now consider that IBM is currently trading for ~15 time earnings and is expected to grow 10% per year over the next 5. In other words, IBM is trading for about 10x 2012 forecasted earnings.

      If IBM grows at 10% and BIDU grows at 75%, which would you rather own over the next 5 years? No risk, no reward.


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