BIDU Investors - Our Quick Report For You.

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:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $107,413 $107,074 $124,493 $123,675
Revenue Growth n/a -0.32% 16.27% -0.66%
Gross Margins 41.49% 48.49% 48.34% 48.3%
Gross Margins Growth n/a 16.87% -0.31% -0.08%
Operating Margins 5.87% 13.39% 8.45% 12.87%
Operating Margins Growth n/a 128.11% -36.89% 52.31%
Net Margins 1.92% 20.99% 8.21% 6.11%
Net Margins Growth n/a 993.23% -60.89% -25.58%
Earnings Per Share $5.9 $64.98 $29.07 $21.53
EPS Growth n/a 1001.36% -55.26% -25.94%
Diluted Shares (MM) 349 346 352 351
Free Cash Flow (MM) $9,337 $18,869 $8,882 $26,170
FCF Growth n/a 102.09% -52.93% 194.64%
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.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.