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, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. 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 33.5%. Since the same quarter one year prior, revenues rose by 43.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BAIDU INC has improved earnings per share by 37.5% 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 $4.78 versus $3.02 in the prior year. This year, the market expects an improvement in earnings ($5.42 versus $4.78).
- 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 38.4% when compared to the same quarter one year prior, rising from $335.90 million to $464.74 million.
- The gross profit margin for BAIDU INC is currently very high, coming in at 73.70%. 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 44.26% significantly outperformed against the industry.
- Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.14 is very high and demonstrates very strong liquidity.
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 $29.83 billion and is part of the technology sector and internet industry. The company has a P/E ratio of 2.9, below the S&P 500 P/E ratio of 17.7. Shares are down 14.2% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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