Summary: OVERPRICED
Score: 7/20
MOS: 0%
Share Price: $190
Sticker Price: $1
Is Baidu stock a good buy?
Baidu is a Chinese multinational tech company founded in 2000 and based out of Beijing, China.
The Baidu search engine is currently the second largest search engine in the world (behind Google) and the fourth largest website in the Alexa Internet rankings.
Some of Baidu’s other products include Baidu Maps (similar to Google Maps), Baidu Wangpan (cloud storage), Baidu News (national and international news), Baidu MP3 (Music downloading service), Baidu Video Search (video platform similar to Youtube), Baidu Baike (online encyclopedia), and Baidu Translate (similar to Google translate).
Recently, ZACKS has rated Baidu as the #1 rated China stock because of the projected earnings growth rate to be up 11% over the last year.
Baidu is clearly a GROWTH STOCK. It’s a large tech conglomerate that looks like a great investment from the outside but when you take a closer look at the financials, this stock could nose dive if a quarterly report reveals slowing growth or negative growth.
Here is a closer look…
- Revenue growth over the last year is 3%. We’ll see what that number looks like when the 2020 annual report is released.
- Free Cash Flow is -77% over the last year. They are running out of available cash fast which is a bad sign.
- Debt has increased by 3% over the last year. With the lack of available cash and the increasing debt, this is another bad sign.
If ZACKS predictions are correct, this stock could continue to go higher but if the annual report falls short of expectations, you might want to be prepared to sell or at least setup a trailing stop loss so you protect yourself from downside losses.
With a score of 7/20, this stock is risky. When you take a closer look at the WHY within Tykr, the ROIC is 4/6 which isn’t bad but the stock falls short with Equity Growth Rate, EPS Growth Rate, Sales Growth Rate, and Cash Growth Rate. Wtih a MOS of 0% (Share Price of $190 vs a Sticker Price of $1) this stock could nose dive.
Their last earnings date was November 16th. This means the next earnings date will most likely occur in February (3 months). If you hold this stock, keep your eye on this one in February. If the financial reports are lower than expected, this might be a good time to get out.
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