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In the latest trading session, Baidu Inc. (BIDU) closed at $82.98, marking a +0.47% move from the previous day. The stock outpaced the S&P 500's daily loss of 2.36%. Elsewhere, the Dow lost 2.48%, while the tech-heavy Nasdaq lost 2.55%.
The the stock of web search company has fallen by 12.64% in the past month, lagging the Computer and Technology sector's loss of 8.4% and the S&P 500's loss of 5.6%.
Market participants will be closely following the financial results of Baidu Inc. in its upcoming release. The company is predicted to post an EPS of $1.96, indicating a 28.99% decline compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $4.3 billion, down 1.56% from the prior-year quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.08 per share and a revenue of $18.8 billion, representing changes of -4.27% and +1.65%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Baidu Inc. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. Baidu Inc. presently features a Zacks Rank of #1 (Strong Buy).
In terms of valuation, Baidu Inc. is currently trading at a Forward P/E ratio of 8.19. This represents a discount compared to its industry's average Forward P/E of 17.47.
Meanwhile, BIDU's PEG ratio is currently 1.96. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Internet - Services stocks are, on average, holding a PEG ratio of 1.2 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 148, which puts it in the bottom 41% of all 250+ industries.