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

·3-min read

In the latest trading session, Baidu Inc. (BIDU) closed at $154.53, marking a +1.32% move from the previous day. This change outpaced the S&P 500's 0.08% gain on the day. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq lost 0.42%.

Prior to today's trading, shares of the web search company had gained 8.8% over the past month. This has outpaced the Computer and Technology sector's loss of 5.11% and the S&P 500's gain of 0.22% in that time.

Baidu Inc. will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.89, down 38.64% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.04 billion, up 8.6% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Baidu Inc.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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Baidu Inc. currently has a Zacks Rank of #5 (Strong Sell).

Valuation is also important, so investors should note that Baidu Inc. has a Forward P/E ratio of 19.55 right now. Its industry sports an average Forward P/E of 24.33, so we one might conclude that Baidu Inc. is trading at a discount comparatively.

We can also see that BIDU currently has a PEG ratio of 10.74. 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. The Internet - Services was holding an average PEG ratio of 2.87 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 209, which puts it in the bottom 19% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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