Baidu Inc. (BIDU) closed the most recent trading day at $125.85, moving -0.65% from the previous trading session. This change lagged the S&P 500's 0.64% gain on the day. Meanwhile, the Dow gained 1.39%, and the Nasdaq, a tech-heavy index, added 0.52%.
BIDU will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.39, down 5.44% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.44 billion, down 10.42% from the prior-year quarter.
BIDU's full-year Zacks Consensus Estimates are calling for earnings of $6.40 per share and revenue of $15.59 billion. These results would represent year-over-year changes of -14.44% and +0.55%, 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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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 remained stagnant. BIDU is currently a Zacks Rank #5 (Strong Sell).
Looking at its valuation, BIDU is holding a Forward P/E ratio of 19.79. Its industry sports an average Forward P/E of 33.08, so we one might conclude that BIDU is trading at a discount comparatively.
Investors should also note that BIDU has a PEG ratio of 2.83 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Services stocks are, on average, holding a PEG ratio of 2.45 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 116, putting it in the top 46% 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.
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