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

Baidu Inc. (BIDU) closed at $117.66 in the latest trading session, marking a +0.61% move from the prior day. This change outpaced the S&P 500's 0.3% gain on the day. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.42%.

Coming into today, shares of the web search company had lost 2.94% in the past month. In that same time, the Computer and Technology sector gained 0.55%, while the S&P 500 gained 2.2%.

Investors will be hoping for strength from BIDU as it approaches its next earnings release. In that report, analysts expect BIDU to post earnings of $1.13 per share. This would mark a year-over-year decline of 64.47%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.85 billion, down 2% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.66 per share and revenue of $16.33 billion. These totals would mark changes of -41.29% and +6.54%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for BIDU. These revisions help to show the ever-changing nature of near-term business trends. 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. 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 has moved 23.37% lower within the past month. BIDU is currently sporting a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, BIDU is holding a Forward P/E ratio of 20.66. For comparison, its industry has an average Forward P/E of 28.38, which means BIDU is trading at a discount to the group.

We can also see that BIDU currently has a PEG ratio of 2.63. 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. The Internet - Services was holding an average PEG ratio of 2.9 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% 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.

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


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