NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- BIDU's very impressive revenue growth greatly exceeded the industry average of 34.3%. Since the same quarter one year prior, revenues leaped by 82.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although BIDU's debt-to-equity ratio of 0.14 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.30, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, BAIDU INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- BAIDU INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BAIDU INC increased its bottom line by earning $3.02 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($4.59 versus $3.02).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 82.9% when compared to the same quarter one year prior, rising from $163.49 million to $299.00 million.
Baidu, Inc. provides Internet search services. The company offers a Chinese language search platform on its Website, Baidu.com; and a Japanese language search platform on its Website, Baidu.jp. The company has a P/E ratio of 20.1, below the average internet industry P/E ratio of 44.3and above the S&P 500 P/E ratio of 17.7. Baidu has a market cap of $37.41 billion and is part of the
industry. Shares are down 1.3% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.