Baidu, Inc. ($BIDU) Earnings (Q2 FY22)

Baidu, Inc. ($BIDU) Earnings and Opinion:


Baidu is a company in the Communication Services sector and operates in the Internet Content and Information industry. The company offers internet services in China. Baidu was incorporated in 2000 and is currently headquartered in Beijing, China. The company made its debut on the stock market in September of 2005.

Baidu Earnings Results (Metrics are in ¥):

  • Revenues of ¥29.65B beating expectations of ¥29.41B
  • Operating Profit of ¥5.49B beating expectations of ¥3.3B
  • EBITDA of ¥7.71B beating expectations of ¥5.47B
  • EPS of ¥15.79 beating expectations of ¥10.65
Opinion:
Baidu declined during todays trading session, after reporting earnings before the market opened this morning. This report was very similar to Pinduoduo's earnings report yesterday. The companies both operate in China, however Baidu reported user metrics, whereas Pinduoduo didn't. The earnings report looked very solid for Baidu, but this didn't dictate a rise in the stock. In fact, the stock declined close to 10% today. I think there is a lot of fear in investing in Chinese companies with upcoming regulation coming. The new audit arrangements are going to expose a lot of flaws that we have never been able to really see in these Chinese company. Baidu is a big internet service in China and also is involved in the streaming business. It will be interesting to see the look of this company when the new audits come out. As far as valuation goes, the P/E ratio was 33.5 last year and the P/S was 2.71. The growth looks like it has signs of growth in the future. The current ratio sits at 3.10 and cash heavily outweighs the debt. It has similar structure to Pinduoduo, but this may not be the truth and the reports could be skewed a bit. In my opinion, of course I am going to pass on this stock. I have no interest to be in the Chinese stock until we get a little more clarity on some aspects. It almost seems too good to be true when valuation is this good and reports always seem to be solid. Once some questions are answered, I think we will have better ability to assess these stocks and see the true value of them.


*Information from Yahoo Finance, Consensus Gurus, CMLVIZ, Motley Fool

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