Uber will receive cash and non-cash assets, including Baidu's online resources as owner of China's biggest Internet search engine, sources added. The investment may be worth as much as $600 million, China National Radio reported earlier, according to Bloomberg.
Baidu's investment gives the search company a slice of the market in China that has been dominated by start ups backed by Alibaba Group Holding (BABA) and Tencent Holdings (TCEHY) , the nation's biggest Internet companies. San Francisco-based Uber this month completed a round of funding that valued the car-booking application at $40 billion, Bloomberg noted.
Shares of Baidu are down 0.62% to $227.80 in pre-market trade.
TheStreet Ratings team rates BAIDU INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BAIDU INC (BIDU) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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 solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BIDU's very impressive revenue growth exceeded the industry average of 28.1%. Since the same quarter one year prior, revenues leaped by 53.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BAIDU INC has improved earnings per share by 28.2% 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 $4.96 versus $4.78 in the prior year. This year, the market expects an improvement in earnings ($38.42 versus $4.96).
- 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 28.3% when compared to the same quarter one year prior, rising from $500.21 million to $641.97 million.
- The gross profit margin for BAIDU INC is rather high; currently it is at 66.29%. 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 28.66% significantly outperformed against the industry.
- Powered by its strong earnings growth of 28.16% and other important driving factors, this stock has surged by 37.17% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: BIDU Ratings Report