Critical Contrast: Baidu (BIDU) versus Its Rivals

Baidu (NASDAQ: BIDU) is one of 44 publicly-traded companies in the “Computer programming, data processing, & other computer related” industry, but how does it contrast to its competitors? We will compare Baidu to similar businesses based on the strength of its valuation, profitability, institutional ownership, earnings, risk, analyst recommendations and dividends.

Analyst Recommendations

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This is a summary of recent ratings and target prices for Baidu and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baidu 1 6 11 1 2.63
Baidu Competitors 509 1908 4632 230 2.63

Baidu presently has a consensus target price of $257.60, suggesting a potential upside of 8.64%. As a group, “Computer programming, data processing, & other computer related” companies have a potential upside of 4.69%. Given Baidu’s stronger consensus rating and higher possible upside, equities analysts plainly believe Baidu is more favorable than its competitors.

Institutional and Insider Ownership

63.1% of Baidu shares are held by institutional investors. Comparatively, 49.2% of shares of all “Computer programming, data processing, & other computer related” companies are held by institutional investors. 16.7% of Baidu shares are held by insiders. Comparatively, 14.7% of shares of all “Computer programming, data processing, & other computer related” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Baidu has a beta of 1.88, meaning that its share price is 88% more volatile than the S&P 500. Comparatively, Baidu’s competitors have a beta of 1.41, meaning that their average share price is 41% more volatile than the S&P 500.

Earnings and Valuation

This table compares Baidu and its competitors gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Baidu $13.03 billion $2.81 billion 29.42
Baidu Competitors $6.96 billion $964.57 million 40.34

Baidu has higher revenue and earnings than its competitors. Baidu is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Baidu and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baidu 21.67% 17.61% 8.15%
Baidu Competitors -16.11% -45.92% -1.15%

Summary

Baidu beats its competitors on 11 of the 13 factors compared.

About Baidu

Baidu, Inc. provides Internet search services in China and internationally. It operates through two segments, Baidu Core and iQIYI. The Baidu Core segment offers products for uses, including Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services through mobile browsers; Baidu Feed that provides users with personalized timeline to meet their personal interests reflected in their past online behaviors, such as search and browsing, and their demographics; and Bear Paw Account that enables verified brands and businesses to aggregate their content from Websites, wapsites, and open-platform apps. It also provides Baijiahao, a publisher platform for content providers; Baidu Post Bar, a social media platform; Haokan Videos, an online short-form video aggregation platform; Baidu Knows, a knowledge sharing platform; Baidu Encyclopedia; Baidu Education, an online educational resources platform; Baidu Mobile Assistant, a mobile app marketplace; Baidu Mobile Guardian, a phone security software; DuerOS, a conversational artificial intelligence platform; Baidu Wallet, an online and mobile payment service; Baidu Consumer Credit, an installment payment service; Baidu Wealth Management, a wealth management service; Baidu Maps that offers services relating to locations and intelligent routing and navigation; Baidu Cloud Drive, a personal cloud service platform; and various mobile products and services. In addition, this segment offers online marketing services based on search queries, contextuals, audience attributes, media and placement attributes, as well as Baidu Feed; Baidu Cloud, a public cloud computing platform; and Apollo, an open source autonomous driving platform. The iQIYI segment provides Internet video streaming services. The company was formerly known as Baidu.com, Inc. and changed its name to Baidu, Inc. in December 2008. Baidu, Inc. was founded in 2000 and is headquartered in Beijing, China.

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