Baidu (NasdaqGS:BIDU) - Share price, News & Analysis

Q: What is the Fair Price of BIDU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

BIDU ($136.14) is trading below our estimate of [[fair value]] ($190.62)

BIDU fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	4/6
Past Performance	0/6
Financial Health	6/6
Dividends	0/6

BIDU Stock Overview

Baidu, Inc. offers internet search services in China.

Rewards

Trading at 28.6% below our estimate of its fair value

Earnings are forecast to grow 28.9% per year

Risk Analysis

No risks detected for BIDU from our risk checks.

Baidu Competitors

Weibo

NasdaqGS:WB

US$4.6b

Kanzhun

NasdaqGS:BZ

US$9.4b

Autohome

NYSE:ATHM

US$4.4b

Twitter

NYSE:TWTR

US$33.9b

Price History & Performance

Summary of all time highs, changes and price drops for Baidu
Historical stock prices
Current Share Price	US$136.14
52 Week High	US$182.60
52 Week Low	US$101.62
Beta	0.70
1 Month Change	-2.82%
3 Month Change	14.54%
1 Year Change	-4.38%
3 Year Change	25.22%
5 Year Change	-39.79%
Change since IPO	1,010.98%

Recent News & Updates

Aug 15

Baidu: A Golden Era May Lie Ahead

Even though Baidu dominates China's search market, with more than 70% market share, it is so much more than just a search engine. It is making progress on cloud computing and chips, and has established a global leadership position in AI and self-driving technology through Apollo (includes robotaxis and robobuses). Jidu, its JV with Geely, is said to be valued ~$3.5 billion based on a new funding round, as it seeks to launch its first commercial vehicle in 2023. It also plans to sell all its holdings in iQIYI for ~$7 billion. The balance sheet is already flooded with cash. Cash & short-term investments represent almost 60% of Baidu's current market cap. Despite the turbulent markets, operating cash flow remains resilient, which will further strengthen the balance sheet. Eventually, Baidu is set to rerate at much higher levels, especially if it can demonstrate strength in its AI, electric vehicle and robotaxi businesses. Baidu (BIDU), along with other prominent Chinese tech stocks such as Alibaba (BABA), has been under severe scrutiny over the past decade. However, even in these challenging times, the company has proven to be highly resilient; not only has it weathered the storm, it is in a terrific position to thrive. Specifically, Baidu has demonstrated tremendous strength on two important metrics, namely 1) underlying operating cash flow generation and 2) balance sheet strength (more on this below). So far this year, the markets are going through a manic-depressive phase. Market sentiment is fragile and the general market indices have come under substantial pressure, as the headlines are flooded with negative news. In addition to high inflation, interest rate hikes, supply chain disruptions, ongoing COVID-19 issues, a potential 2022 monkeypox outbreak, and the war in Ukraine, we now also have concerns about Taiwan, exacerbated by Nancy Pelosi's visit to the island. As a result, in June, the S&P 500 entered bear market territory, dropping more than 20% from its highs. This is the worst performance since the early days of COVID-19 (March 2020). The good news is that, as of July, sentiment has improved materially. In fact, July was the best month since 2020. So, in just a couple of months, we went from experiencing the worst performance since March 2020 to also experiencing the best performance since 2020. Moreover, positive momentum is continuing to build in August, as U.S. inflation eased in July and wholesale inflation actually fell (due to a slide in energy prices), another sign that prices increases are slowing. Improving inflation data has sparked a stock market rally. Earlier this year, mostly in Q1 and in June/July, Baidu was actually faring much better relative to the major U.S. indices, in part due to the gradual easing of the Chinese tech crackdown. BIDU data by YCharts However, the sentiment in China is starting to look gloomy again, especially after Pelosi's visit to Taiwan, which adds even more pressure to the already strained US-Chinese relations. Even so, and despite the recent rally in the U.S. markets, on a year-to-date basis, Baidu is still outperforming the tech-heavy Nasdaq and S&P 500, which are down 16.6% and 10.2%, respectively, and has delivered similar performance to the Dow Jones, which is down 5.61%. Not only has Baidu outperformed most major U.S. indices, it has also outperformed all of its Chinese tech peers, by a wide margin: BIDU data by YCharts Baidu reported solid Q1 2022 results, despite challenges posed by the COVID-19 resurgence in China. Results topped expectations, thanks to continued strength in its core business, particularly non-online marketing revenue and cloud services, with non-ad revenues increasing by 35% year over year, driven by Baidu AI Cloud, which grew 45% year over year. All in all, Baidu remains extremely profitable, delivering an adjusted EPS of $1.77 on $4.48 billion in revenue (compared to estimates of 83 cents per share and $4.16 billion in revenue), underlying operating cash flow generation remains stable, and the balance sheet is flooded with cash. It is important to emphasise that the resilience in Baidu's operating cash flow, and ability to hoard cash, is not a recent phenomenon. In fact, this has been the case for more way more than a decade. BIDU Cash and Short Term Investments (Annual) data by YCharts The cash balance has skyrocketed at a very rapid pace, to almost $30 billion, largely due to strong and consistent operating cash flows. Of importance, the cash balance has increased at a much faster rate versus long term debt. However, despite the massive cash balance and ability to generate substantial operating cash flows, Baidu's market cap remains depressed, below $50 billion. To put things into context: cash & short term investments represent almost 60% of Baidu's current market cap net debt is negative, as the company has more cash than long term debt net cash represents more than 30% of the current market cap

Aug 08

Baidu secures China's first-ever permits for commercial fully driverless robotaxi services

Chinese tech giant, Baidu (NASDAQ:BIDU) has secured the first permits in China to offer commercial fully driverless robotaxi services to the public on open roads. Apollo Go, Baidu's autonomous ride-hailing service, is now authorized to collect fares for robotaxi rides - completely without human drivers in the car - in Chongqing and Wuhan, two of China's largest megacities. This comes few months after the company scored a permit to provide driverless ride-hailing services to the public on open roads in Beijing. “This is a tremendous qualitative change,” said Wei Dong, vice president and chief safety operation officer of Baidu’s Intelligent Driving Group, in a statement. “We believe these permits are a key milestone on the path to the inflection point when the industry can finally roll out fully autonomous driving services at scale.” In Wuhan, robotaxi service will operate from 9 a.m. to 5 p.m and cover a 13 square kilometer area in the city’s Economic and Technological Development zone, which is known as China’s ‘Auto City.’ Chongqing’s service will run from 9:30 a.m. to 4:30 p.m. in a 30 square kilometer area in Yongchuan District. Each city will have a fleet of five Apollo 5th generation robotaxis, according to Baidu. Last month, the company revealed the designs for its sixth generation electric robotaxi, the Apollo RT6 EV. Apollo Go also has a presence in Shanghai, Shenzhen, Guangzhou, Changsha, Cangzhou, Yangquan and Wuzhen. By the end of 2022, the company expects to add another 300 Apollo 5th gen robotaxis to its existing fleet and plans to expand its ride-hailing service to 65 cities by 2025 and 100 cities by 2030. Read the most recent analysis on the stock here.

Aug 04

Baidu (NASDAQ:BIDU) May Have Issues Allocating Its Capital

To find a multi-bagger stock, what are the underlying trends we should look for in a business? In a perfect world, we'd...

Shareholder Returns

	BIDU	US Interactive Media and Services	US Market
7D	0.4%	4.9%	4.5%
1Y	-4.4%	-27.4%	-8.9%

Return vs Industry: BIDU exceeded the US Interactive Media and Services industry which returned -28.3% over the past year.

Return vs Market: BIDU exceeded the US Market which returned -9.6% over the past year.

Price Volatility

Is BIDU's price volatile compared to industry and market?
BIDU volatility
BIDU Average Weekly Movement	7.5%
Interactive Media and Services Industry Average Movement	10.4%
Market Average Movement	7.6%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.1%

Stable Share Price: BIDU is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: BIDU's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	45,500	Robin Li	https://www.baidu.com

Baidu, Inc. offers internet search services in China. It operates through Baidu Core and iQIYI segments. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; and Haokan, a short video app.

Baidu Fundamentals Summary

How do Baidu's earnings and revenue compare to its market cap?
BIDU fundamental statistics
Market Cap	US$47.04b
Earnings (TTM)	-US$2.45b
Revenue (TTM)	US$18.38b

2.6x

P/S Ratio

-19.2x

P/E Ratio

Is BIDU overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BIDU income statement (TTM)
Revenue	CN¥124.77b
Cost of Revenue	CN¥64.69b
Gross Profit	CN¥60.08b
Other Expenses	CN¥76.74b
Earnings	-CN¥16.66b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 30, 2022

Earnings per share (EPS)	-48.22
Gross Margin	48.15%
Net Profit Margin	-13.35%
Debt/Equity Ratio	37.1%

How did BIDU perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is BIDU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BIDU?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for BIDU. This is calculated by dividing BIDU's market cap by their current preferred multiple.
What is BIDU's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥319.32b

BIDU key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.9x
Enterprise Value/EBITDA	9x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does BIDU's PS Ratio compare to its peers?

BIDU PS Ratio vs Peers

The above table shows the PS ratio for BIDU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	6.7x
WB Weibo	2x	8.5%	US$4.6b
BZ Kanzhun	13.9x	32.8%	US$9.4b
ATHM Autohome	4.5x	7.2%	US$4.4b
TWTR Twitter	6.5x	14.4%	US$33.9b
BIDU Baidu	2.6x	12.1%	US$47.0b

Price-To-Sales vs Peers: BIDU is good value based on its Price-To-Sales Ratio (2.6x) compared to the peer average (6.7x).

Price to Earnings Ratio vs Industry

How does BIDU's PE Ratio compare vs other companies in the US Interactive Media and Services Industry?

Price-To-Sales vs Industry: BIDU is expensive based on its Price-To-Sales Ratio (2.6x) compared to the US Interactive Media and Services industry average (2x)

Price to Sales Ratio vs Fair Ratio

What is BIDU's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BIDU PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	2.6x
Fair PS Ratio	4.3x

Price-To-Sales vs Fair Ratio: BIDU is good value based on its Price-To-Sales Ratio (2.6x) compared to the estimated Fair Price-To-Sales Ratio (4.3x).

Share Price vs Fair Value

What is the Fair Price of BIDU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BIDU ($136.14) is trading below our estimate of fair value ($190.62)

Significantly Below Fair Value: BIDU is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Baidu forecast to perform in the next 1 to 3 years based on estimates from 39 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

28.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BIDU is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).

Earnings vs Market: BIDU is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: BIDU is expected to become profitable in the next 3 years.

Revenue vs Market: BIDU's revenue (12.1% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: BIDU's revenue (12.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BIDU's Return on Equity is forecast to be low in 3 years time (7.5%).

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Past Performance

How has Baidu performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-4.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BIDU is currently unprofitable.

Growing Profit Margin: BIDU is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: BIDU is unprofitable, and losses have increased over the past 5 years at a rate of 4.6% per year.

Accelerating Growth: Unable to compare BIDU's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: BIDU is unprofitable, making it difficult to compare its past year earnings growth to the Interactive Media and Services industry (1.3%).

Return on Equity

High ROE: BIDU has a negative Return on Equity (-8.08%), as it is currently unprofitable.

Discover strong past performing companies

Financial Health

How is Baidu's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: BIDU's short term assets (CN¥211.5B) exceed its short term liabilities (CN¥68.2B).

Long Term Liabilities: BIDU's short term assets (CN¥211.5B) exceed its long term liabilities (CN¥82.2B).

Debt to Equity History and Analysis

Debt Level: BIDU has more cash than its total debt.

Reducing Debt: BIDU's debt to equity ratio has reduced from 52.5% to 37.1% over the past 5 years.

Debt Coverage: BIDU's debt is well covered by operating cash flow (21.4%).

Interest Coverage: BIDU earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Baidu current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate BIDU's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate BIDU's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if BIDU's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if BIDU's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as BIDU has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure

CEO

Robin Li (53 yo)

22.58yrs

Tenure

Mr. Yanhong Li, also known as Robin, Co-Founded Baidu, Inc. in January 2000 and has been its Chief Executive Officer since February 2004 and oversees its overall strategy and business operations. Mr. Li wa...

Leadership Team

Experienced Management: BIDU's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: BIDU's board of directors are considered experienced (6.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31