Baidu Inc. (BIDU) Plunges More Than Broader Markets: What You Need To Know

Baidu Inc. (BIDU) closed at $134.76 last trading session, marking a -0.7% move from the previous day. This change lagged the S&P 500’s 0.27% loss on the day. Meanwhile, the Dow Jones gained 0.4% and the Nasdaq, a technology-heavy index, lost 0.18%.

At dawn today, shares of the web search company had gained 0.41% in the past month, lagging the IT sector’s 7.53% gain and technology and the 7.36% gain in the S&P 500 during this period.

Baidu Inc. will look to show strength ahead of its next earnings release. In this report, analysts expect Baidu Inc. to post a profit of $0.70 per share. This would mark a year-over-year decline of 62.96%. Meanwhile, our latest consensus estimate calls for revenue of $4.46 billion, up 3.9% from the prior year quarter.

BIDU’s full-year Zacks consensus estimates call for earnings of $8.28 per share and revenue of $21.33 billion. These results would represent year-over-year variations of -1.43% and +10.53%, respectively.

Investors may also notice recent changes in analysts’ estimates for Baidu Inc. These revisions generally reflect the latest short-term business trends, which may change frequently. Thus, positive revisions to estimates reflect analysts’ optimism about the company’s business and profitability.

Based on our research, we believe that these estimate revisions are directly related to the team’s close stock movements. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven track record of outperformance, with #1 stocks returning an average of +25% per year since 1988. In the past 30 days, our consensus EPS projection is down 0.9%. Baidu Inc. currently holds a Zacks ranking of #5 (strong selling).

Investors should also note Baidu Inc.’s current valuation metrics, including its Forward P/E ratio of 16.4. For comparison, its industry has an average Forward P/E of 21.21, meaning Baidu Inc. is trading at a discount to the group.

Investors should also note that BIDU has a PEG ratio of 9.01 at this time. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. Internet – Services held an average PEG ratio of 2.57 at yesterday’s closing price.

The Internet – Services industry is part of the IT and technology sector. This group has a Zacks Industry ranking of 180, which places it in the bottom 29% of all 250+ industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Be sure to use to track all of these stock movement metrics, and more, in future trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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