The company has good cash reserves and an A strength balance sheet. The customer count is up and so is the revenue per customer.
The professional analysts have issued 13 strong buy, 12 buy, four hold and no underperform or sell recommendations to their clients. Analysts feel if their projections are correct investors should see an annual increase in price in the 27% to 31% range for at least five years.
I gauge the individual investor's sentiment by the opinions they give on Motley Fool and 5,045 readers gave the stock an 87% vote of confidence to beat the market. Short interest seems to be growing from a low of four million shares in mid-May to almost seven million shares short recently. The stock gets a B in TheStreet rating system.Performance Against its Peers: While BIDU was down 22% in the past year, Google (GOOG) was up 24%, Amazon.com (AMZN) was up 16% and eBay (EBAY) was up 52%. Google was rated A by TheStreet. Analysts project revenue will be up 46.9% this year and another 26.7% next year. Earnings are estimated to be up 16% next year and continue to increase by 23.16% for the next five years. Amazon was rated C+ by TheStreet. Revenue is projected to be up 30.5% this year and another 26.4% next year. Earnings are expected to increase by 209.1% this year and continue to increase annually by 33.6% for the next five years. eBay was rated A by TheStreet. Revenue expected to increase by 20.3% this year and increase again next year by 14.9%. Earnings should be up 16.2% next year and average an annual increase of 13.23% for the next five years. Conclusion: I have a hard time justifying why Baidu is down and the rest of its peers are up. The stock has a solid balance sheet and a business plan aimed at the growing Chinese and Japanese online markets. With an annual earnings growth projected to increase by 39.98% over the next five years it has the highest earnings projections by the professional analysts. I think the price is depressed and the short interest will soon have to cover.