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

Zacks Equity Research

Baidu Inc. (BIDU) closed at $103.69 in the latest trading session, marking a -0.44% move from the prior day. This move lagged the S&P 500's daily gain of 0.19%. Elsewhere, the Dow lost 0.11%, while the tech-heavy Nasdaq added 0.81%.

Coming into today, shares of the web search company had gained 1.31% in the past month. In that same time, the Computer and Technology sector gained 0.15%, while the S&P 500 gained 0.56%.

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 $1.47, down 46.93% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.01 billion, down 2.4% from the year-ago period.

BIDU's full-year Zacks Consensus Estimates are calling for earnings of $4.65 per share and revenue of $15.64 billion. These results would represent year-over-year changes of -51.76% and +2.03%, respectively.

It is also important to note the 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. 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.

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 has moved 19.2% lower. BIDU is currently a Zacks Rank #4 (Sell).

Investors should also note BIDU's current valuation metrics, including its Forward P/E ratio of 22.42. This represents a discount compared to its industry's average Forward P/E of 27.71.

Also, we should mention that BIDU has a PEG ratio of 8.11. 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. Internet - Services stocks are, on average, holding a PEG ratio of 2.23 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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