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Baidu Inc. (BIDU) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Baidu Inc. (BIDU) closed the most recent trading day at $99.53, moving -1.91% from the previous trading session. This change lagged the S&P 500's 1.56% loss on the day. Elsewhere, the Dow lost 1.19%, while the tech-heavy Nasdaq lost 1.67%.

Coming into today, shares of the web search company had lost 3.42% in the past month. In that same time, the Computer and Technology sector lost 0.85%, while the S&P 500 lost 1.22%.

Wall Street will be looking for positivity from BIDU as it approaches its next earnings report date. The company is expected to report EPS of $1.76, down 36.46% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.02 billion, down 2.08% from the prior-year quarter.

BIDU's full-year Zacks Consensus Estimates are calling for earnings of $5.20 per share and revenue of $15.67 billion. These results would represent year-over-year changes of -46.06% and +2.25%, respectively.

Investors might also notice recent changes to analyst estimates for BIDU. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. BIDU is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note BIDU's current valuation metrics, including its Forward P/E ratio of 19.51. Its industry sports an average Forward P/E of 27.33, so we one might conclude that BIDU is trading at a discount comparatively.

Investors should also note that BIDU has a PEG ratio of 7.06 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.54 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 171, which puts it in the bottom 33% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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