Why One Analyst Says Baidu is On Track For Recovery
Baidu Inc (NASDAQ: BIDU) reported a better-than-expected second-quarter print, and the report signals the company is on track for a recovery this year, according to Joseph Berger, CEO of Pacific Epoch, a provider of research on China's digital consumers.
The Analyst
Berger discussed Baidu's earnings during a CNBC interview Tuesday.
The Thesis
Baidu, a leading Chinese language internet search provider often referred to as the "Google of China," has seen its business suffer from lower revenue and regulatory changes over the years, Berger said. But the company's Q2 report offered evidence of a turnaround in the form of improvements in the news feed and dynamic ad businesses, the CEO said.
Berger's firsthand checks and surveys show Baidu is benefiting from a 40-percent year-over-year increase in adoption among advertisers, and they plan to spend more money on the platform in the coming quarters.
Baidu is looking to diversify its business away from online searches into venues such as autonomous driving and artificial intelligence, Berger said. From a strategic point of view, the decision is the correct one, as it signals the Chinese company's commitment to find new ways to enhance its ecosystem, he said.
"We think over the long run this is a positive for them."
Price Action
Baidu shares were down 6.86 percent at $230.26 at the time of publication Wednesday.
Related Links:
KeyBanc Upgrades Baidu, Lowers Alibaba Estimates In Chinese Internet Update
Baidu Set For 20% Growth After iQIYI Spinoff, Bernstein Says In Upgrade
Screenshot courtesy of Baidu.
Latest Ratings for BIDU
Jul 2018 | Credit Suisse | Upgrades | Neutral | Outperform |
Jul 2018 | KeyBanc | Upgrades | Sector Weight | Overweight |
May 2018 | Credit Suisse | Downgrades | Outperform | Neutral |
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