Baidu Valuations Hold 20% To 34% Upside Potenital

  • Baidu is financially robust, and the stock has fallen providing an investment opportunity.
  • Even using conservative revenue estimates & valuation multiples, Baidu has upside potential.
  • Baidu valuations indicate a 19% to 34% upside potential.

Video Transcript

Hello and welcome to this videograph about Baidu (NASDAQ:BIDU).

Baidu 2014 Revenue And Profitability

Baidu, also known as China's Google (NASDAQ:GOOG) is a financially robust company. In twenty fourteen, Baidu continued to deliver a strong year on year revenue growth of about 50%, with net margins coming in at 27%.

Baidu Stock Performance

In recent times, Baidu's stock has fallen by close to 17% from its 52 week high, and 11% since Jan 2015. The more recent decline was also partly due to its weaker than expected revenue guidance for Q1 twenty fifteen.

Baidu 2015 Revenue Estimates

Even so, analysts expect China's search giant to report a revenue of 11 billion dollars. Our earlier projections based on e-Marketer's estimates of digital ad spends in China, and Baidu's growing share, peg Baidu's revenue for the year, at 11.4 billion Dollars. Today, though for the purpose of valuation, we'll go with the more conservative estimate of the two.

Baidu Valuations

Baidu currently trades at a price to sales ratio of 9.3. To accommodate a decline in profit margins or any slip ups on the revenue front, let's use price to sales multiples ranging from  8 to 9, to compute price targets for Baidu. Based on analyst estimates of Baidu's revenue for 2015, at price to sales multiples ranging from 8 to 9, Baidu's stock price has a huge upside potential ranging from 19% to 34 percent.

Baidu Price Target

Baidu's price targets range from 248 to 279 dollars a share.

Thanks for watching this video. For more videos about your favorite stocks, always visit amigobulls.com.

You can also see our Baidu stock analysis to get more insights on Baidu's revenue growth trends, free cash flow margins, daily stock movements and more. If you're looking to evaluate Baidu's peers from the internet search space, you could also see our Google stock analysis video and Yandex stock analysis video.

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Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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