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Baidu Inc. (BIDU) Stock Sinks As Market Gains: What You Should Know

Baidu Inc. (BIDU) closed at $168.11 in the latest trading session, marking a -0.97% move from the prior day. This move lagged the S&P 500's daily gain of 0.76%. Elsewhere, the Dow gained 0.67%, while the tech-heavy Nasdaq added 0.71%.

Coming into today, shares of the web search company had gained 4.47% in the past month. In that same time, the Computer and Technology sector lost 0.35%, while the S&P 500 gained 0.75%.

Investors will be hoping for strength from BIDU as it approaches its next earnings release, which is expected to be February 12, 2019. The company is expected to report EPS of $1.91, down 16.59% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.86 billion, up 6.58% from the year-ago period.

Investors should also note any recent changes to analyst estimates for BIDU. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. BIDU currently has a Zacks Rank of #3 (Hold).

Digging into valuation, BIDU currently has a Forward P/E ratio of 16.55. This represents a discount compared to its industry's average Forward P/E of 27.07.

It is also worth noting that BIDU currently has a PEG ratio of 0.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Services stocks are, on average, holding a PEG ratio of 2.25 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 82, which puts it in the top 33% of all 250+ industries.

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

To follow BIDU in the coming trading sessions, be sure to utilize Zacks.com.


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