Editor's Note: 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.
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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. 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 exceeded the industry average of 36.2%. Since the same quarter one year prior, revenues leaped by 61.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although BIDU's debt-to-equity ratio of 0.12 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.47, which clearly demonstrates the ability to cover short-term cash needs.
- 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 ($4.71 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 71.1% when compared to the same quarter one year prior, rising from $254.76 million to $435.99 million.
- The gross profit margin for BAIDU INC is currently very high, coming in at 77.00%. Regardless of BIDU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BIDU's net profit margin of 50.80% significantly outperformed against the industry.
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 21.6, below the average internet industry P/E ratio of 44.6 and above the S&P 500 P/E ratio of 17.7. Baidu has a market cap of $45.75 billion and is part of the
industry. Shares are down 0.6% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.