Company Description
Baidu offers search engine and other Internet services through a series of third-party sites. The applications that allows users to search the Web for images, video, and blogs is also offered in Japanese. Additionally it provides customer direct marketing services.
Beats the Street
On Jul 23 the company reported second-quarter results that included a 37% year-over-year increase in revenue, up to $161 million. This drove net income 45% higher to just over $56 million. As a result, earnings per share came in at $1.61, beating the Zacks consensus estimate by 15 cents, more than 10%.
This was the second surprise in the past year.
Analysts Can't Keep Up
Over the past month 12 analysts polled by Zacks have provided 15 upward revisions for this year and 11 for next year. The Zacks consensus for 2009 is now $5.92, up from $5.65.
Estimates for next year now average $8.32, up from $7.96 in the past 30 days after 11 upward revisions were made. Given these forecasts, and earnings of $4.43 last year, growth rates for 2009 and 2010 are 34% and 41%, respectively.
Valuations
Shares of BIDU are trading at a price that would cause a bit of anxiety amongst the value conscious investor. One share will cost you about 71 times earnings.
The PEG ratio is 1.6 times, which brings the price back to earth, but is still a bit higher than I like so see. However, further upgrades will likely bring the valuation down, but will probably remain on the more expensive side.
The Chart
The Chinese search engine has done nothing but set new high watermarks over the past 6 months and just recently set a new 52-week high. take a look at the chart below.
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