Baidu, Inc. (BIDU: 107.15 0.00 0.00%) has once again hit a new all-time high after reporting excellent Q3 results that came in ahead of expectations. With four consecutive earnings surprises and a bullish growth projection, the long-term picture looks good too for this Zacks #1 rank stock.
Company Description
Baidu, Inc. is a China-based Internet search provider. The company was founded in 2000 and has a market cap of $39 billion.
BIDU has been strong for the last year with the market, but shares got an extra boost on Oct 21 after the company reported another strong quarter.
Third-Quarter Results
Revenue for the period was up 76% from last year to $337.2 million. Earnings also looked good, coming in at 45 cents, 7% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 14% over the last four quarters.
The company's traffic acquisition cost (TAC), a key Internet search provider performance metric, also showed huge gains, declining to 8.9% of revenue from 15.3% last year,
The awesome top-line growth coupled with strong margin improvements enabled Baidu to boost its operating to $177 million, a 127% increase from last year.
Balance Sheet
The company also has an awesome balance sheet, with its cash position up $182 million from last year to $610 million with no debt.
Estimates
We saw some movement in estimates off the good quarter, with the current year adding 5 cents to $1.45 and the next-year estimate gaining 14 cents to $2.34, a bullish 61% growth projection.
Valuation
In light of the big gains, shares of BIDU are a bit pricey, trading with a forward P/E of 78X against its peer average of 51X.
2-Year Chart
On the chart, shares got a nice boost from the strong quarter to hit a new all-time high at $113.78. The MACD below the chart is bullish too, with the short-term average trading ahead of the long-term average, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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