Baidu logged a 3.55% change Friday and is now trading at a price of $156.27 per share.
Baidu shares moved 5.98% over the last 52 weeks, with a high of $160.88 and a low of $73.58. During this time, the stock outperformed the S&P 500 index by 19.19%. As of January 2022, the company's 50-day average price is $142.0. Baidu, Inc. provides Internet search services primarily in China. The large-cap Technology company is based in Beijing, China. Baidu has not offered any dividends in the last year.
The Company Has a Steady Stream of Positive Cash Flows:
|Gross Margins Growth||n/a||16.87%||-0.31%||-0.08%|
|Operating Margins Growth||n/a||128.11%||-36.89%||52.31%|
|Net Margins Growth||n/a||993.23%||-60.89%||-25.58%|
|Earnings Per Share||$5.9||$64.98||$29.07||$21.53|
|Diluted Shares (MM)||349||346||352||351|
|Free Cash Flow (MM)||$9,337||$18,869||$8,882||$26,170|
|Capital Expenditures (MM)||$19,121||$5,331||$11,240||$0|
|Net Debt / EBITDA||1.22||0.8||1.25||2.56|
Baidu Is Fairly Priced at Current Levels:
Compared to the Technology sector's average of 27.16, Baidu has a trailing twelve month P/E ratio of 51.07 and, according to its EPS guidance of 11.35, an expected P/E ratio of 13.77. Baidu's PEG ratio is 0.33 based on its 156.2% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Baidu's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 3.91, which suggests that the company's shares are actually overvalued.
However, Baidu is likely undervalued in terms of its equity because its P/B ratio is 1.323 compared to its sector average of 6.23. The company's shares are currently trading -79.39% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 39.98 * 639.29) = $758.34
Despite Baidu's elevated earnings multiple, the company's impressive cash flow trend, decent P/B ratio, and reasonable leverage demonstrate the company may be fairly valued.
Baidu Is the Subject of Mixed Market Indicators:
37 analysts are following Baidu and have set target prices ranging from $101.74 to $235.72 per share. On average, they have given the company a rating of buy. At the current price of $156.27, BIDU is trading -12.87% away from its average analyst target price of $179.36 per share, implying an analyst consensus of some upside potential for the stock.