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Baidu Inc. (BIDU) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Baidu Inc. (BIDU) closed at $135.81 in the latest trading session, marking a +1.21% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.4%, and the Nasdaq, a tech-heavy index, added 0.87%.

Prior to today's trading, shares of the web search company had lost 2.13% over the past month. This has lagged the Computer and Technology sector's gain of 2.81% and the S&P 500's gain of 1.43% in that time.

Investors will be hoping for strength from BIDU as it approaches its next earnings release, which is expected to be February 27, 2020. On that day, BIDU is projected to report earnings of $2.68 per share, which would represent year-over-year growth of 39.58%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.96 billion, up 0.17% from the year-ago period.

Investors should also note any 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 5.4% higher. BIDU is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that BIDU has a Forward P/E ratio of 15.49 right now. For comparison, its industry has an average Forward P/E of 28.02, which means BIDU is trading at a discount to the group.

Investors should also note that BIDU has a PEG ratio of 2.13 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. BIDU's industry had an average PEG ratio of 2.17 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 103, putting it in the top 41% 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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