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 revenue growth has slightly outpaced the industry average of 44.4%. Since the same quarter one year prior, revenues rose by 49.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BIDU's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.03, 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 ($4.74 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 59.2% when compared to the same quarter one year prior, rising from $300.63 million to $478.57 million.
- The gross profit margin for BAIDU INC is currently very high, coming in at 77.30%. 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 48.10% 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. Baidu has a market cap of $33.04 billion and is part of the technology sector and internet industry. The company has a P/E ratio of 17.7, equal to the S&P 500 P/E ratio of 17.7. Shares are down 18.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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