Baidu Inc. (BIDU) Gains But Lags Market: What You Should Know

In the latest trading session, Baidu Inc. (BIDU) closed at $98.95, marking a +1.35% move from the previous day. This move lagged the S&P 500's daily gain of 3.35%. At the same time, the Dow added 3.19%, and the tech-heavy Nasdaq gained 3.62%.

Prior to today's trading, shares of the web search company had lost 18.58% over the past month. This has lagged the Computer and Technology sector's loss of 12.32% and the S&P 500's loss of 14.37% in that time.

Investors will be hoping for strength from BIDU as it approaches its next earnings release. On that day, BIDU is projected to report earnings of $0.74 per share, which would represent year-over-year growth of 80.49%. Our most recent consensus estimate is calling for quarterly revenue of $3.14 billion, down 12.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.66 per share and revenue of $16.48 billion. These totals would mark changes of +2.41% and +6.24%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for BIDU. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection has moved 7.48% lower. BIDU currently has a Zacks Rank of #3 (Hold).

Investors should also note BIDU's current valuation metrics, including its Forward P/E ratio of 12.74. Its industry sports an average Forward P/E of 24.94, so we one might conclude that BIDU is trading at a discount comparatively.

Also, we should mention that BIDU has a PEG ratio of 1.27. 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 1.84 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 68, putting it in the top 27% 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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