Baidu (BIDU) vs. GDS (GDS) Head-To-Head Review

Baidu (NASDAQ:BIDU) and GDS (NASDAQ:GDS) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Volatility and Risk

Baidu has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, GDS has a beta of 2.69, meaning that its share price is 169% more volatile than the S&P 500.

Institutional & Insider Ownership

61.3% of Baidu shares are owned by institutional investors. Comparatively, 39.3% of GDS shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Baidu and GDS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baidu 0 5 15 0 2.75
GDS 1 0 6 1 2.88

Baidu presently has a consensus target price of $294.20, indicating a potential upside of 43.96%. GDS has a consensus target price of $38.89, indicating a potential upside of 40.64%. Given Baidu’s higher probable upside, equities research analysts clearly believe Baidu is more favorable than GDS.

Valuation & Earnings

This table compares Baidu and GDS’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Baidu $13.03 billion 5.44 $2.81 billion $8.06 25.35
GDS $248.40 million 13.07 -$48.38 million ($0.51) -54.22

Baidu has higher revenue and earnings than GDS. GDS is trading at a lower price-to-earnings ratio than Baidu, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Baidu and GDS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baidu 27.11% 18.37% 9.04%
GDS -18.51% -8.53% -2.72%

Summary

Baidu beats GDS on 10 of the 14 factors compared between the two stocks.

Baidu Company Profile

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.

GDS Company Profile

GDS Holdings Limited, together with its subsidiaries, designs, builds, and operates data centers in the People's Republic of China. The company provides colocation, managed hosting, and managed cloud services. Its data centers service customers that primarily operate in the Internet and banking industries in Shanghai, Beijing, Shenzhen, Guangzhou, and Chengdu. The company serves Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was incorporated in 2006 and is headquartered in Shanghai, the People's Republic of China.

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