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Baidu Inc. (BIDU) Gains But Lags Market: What You Should Know

Zacks Equity Research

Baidu Inc. (BIDU) closed the most recent trading day at $131.05, moving +0.11% from the previous trading session. This change lagged the S&P 500's 0.73% gain on the day. Elsewhere, the Dow gained 0.6%, while the tech-heavy Nasdaq added 1.13%.

Prior to today's trading, shares of the web search company had lost 7.06% over the past month. This has lagged the Computer and Technology sector's gain of 5.28% and the S&P 500's gain of 2.95% in that time.

Wall Street will be looking for positivity from BIDU as it approaches its next earnings report date. This is expected to be February 27, 2020. In that report, analysts expect BIDU to post earnings of $2.68 per share. This would mark year-over-year growth of 39.58%. Meanwhile, our latest consensus estimate is calling for revenue of $3.96 billion, up 0.17% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for BIDU. These revisions help to show the ever-changing nature of near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 5.58% higher. BIDU currently has a Zacks Rank of #3 (Hold).

Digging into valuation, BIDU currently has a Forward P/E ratio of 15.11. This represents a discount compared to its industry's average Forward P/E of 28.07.

It is also worth noting that BIDU currently has a PEG ratio of 2.08. 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. BIDU's industry had an average PEG ratio of 2.09 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 106, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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