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Baidu, Inc. Message Board

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  • jagad5 jagad5 Nov 9, 2007 12:43 PM Flag

    look at the fundamentals

    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.

    JMHO
    Jag

 
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