Baidu stock rating as "buy"

According to reports from foreign media, TheStreetRatings, a rating agency of TheStreet, a famous financial website in the United States, recently released a report on Baidu's stock rating as "Buy."

The following is a summary of the report:

Trade-Ideas said Baidu shares hit a new high in the near term and set their stock rating "buy". Trade-Ideas said it bases its judgment on these judgments, except for certain proprietary factors:

(1) The average turnover of Baidu shares (calculated by multiplying the average daily trading volume by the share price) is 610.6 million U.S. dollars;

(2) Baidu shares traded 54273 shares today;

(3) Baidu shares hit a new high today.

Baidu shares price-earnings ratio of 29.5 times. Currently, 11 analysts rank Baidu's stock as "Buy", none as "Sell", and three as "Hold." In the past 30 trading days, Baidu shares traded at an average of 3.9 million shares a day. The company currently has a market capitalization of 64.8 billion U.S. dollars, belonging to the technology industry and the Internet industry. As of Monday's close, shares of Baidu rose 5%.

An overview of TheStreetRatings's analysis is as follows:

TheStreet Quant Ratings downgraded Baidu's stock rating to "Buy." The company's strengths lie in several areas such as strong revenue growth, rising earnings per share, and growing net profits by most standards All have a reasonable level of debt, a relatively stable share price performance and a solid financial position. We think these strong performance outweighs our previous expectation based on its P / E and book value.

Analysis points:

(1) Baidu revenue growth rate greatly exceeded the industry average of 21.2%. Since the same period last year, Baidu's revenue has grown by 59%, this growth has a positive impact on the company's net profit and enhance the company's earnings per share.

(2) Earnings per share of Baidu Equity increased by 22.1% as compared with the same period of previous year. The Company's earnings per share has maintained a very positive growth in the past two years and we think this trend will continue.

(3) Baidu's quarterly net income was $ 407.82 million, an increase of 24% from $ 328.92 million in the same period last year. The increase was significantly higher than the average of the Internet software and service industries, but still below the same period as the S & P 500.

(4) Investors have apparently already started to recognize some of the positive factors mentioned in this report, such as earnings growth. This has played a role in boosting Baidu's share price sharply by 96.02% in the past year. This is also better than the S & P 500 index over the same period. As far as the stock's future performance is concerned, despite the fact that it has risen significantly above its peers in the past year, we still think the stock price will continue to rise in the future.

(5) Baidu's current debt-to-equity ratio is 0.45 times higher than the industry average, implying further assessment should be made of the management of its debt level. Meanwhile, Baidu's quick ratio stands at 3.56 times the high level, indicating that the company's funds still have a very strong liquidity.