"The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks," our Quant Ratings team wrote in a new research note on the Chinese internet company.
On the positive end of the spectrum, Quant Ratings noted the company's high quick ratio of 1.72, which suggests "strong liquidity." Our team also noted the high gross profit margin of 50.21%, which is a healthy figure even if it decreased from the same period last year.
However, Quant Ratings noted a number of negatives in Baidu's performance. For instance, year-over-year revenue increased by less than 1%, which trailed the industry's 21.1% average revenue growth during the same period. Additionally, Baidu's return on equity greatly decreased when compared to the same period last year, signaling "major weakness within the corporation," according to our team. Net operating cash flow was also down year-over-year, with the company's $683.35 million being down 7% from last year.
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(Our Quant Ratings service assesses stocks using a proprietary computer model that runs a variety of factors through quantitative and technical analysis. Ratings do not necessarily reflect the opinions of Jim Cramer or other columnists, who may use different criteria to grade stocks.)
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