| Stock (Symbol) | Stock Price | |
Baidu.com (BIDU) |
$174 |
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| Data is as of | Expected to Report | Sector |
August 7, 2015 |
Oct 27 – Nov 2 |
Technology |
| Sharek’s Take | ||
 Baidu once again lowered profit estimates as it “spends to grow” but now with the Chinese stocks free-falling, BIDU is on a slippery slope as well. Management just lowered estimates after the company reported earnings, the 3rd time in the last 3 qtrs. 2015 estimates have fallen from $8.57 to $7.15, $6.95 and now $5.28 the last 4 qtrs. Today the stock is down $9 to $159 and still sells for 30 times earnings. The Chinese have devalued their currency for the 2nd straight day and Chinese stocks are falling fast. Although I consider BIDU a long-term buy-and-hold investment, we have to get out-of-the-way and let the stock fall where it may. It could go as low as 15 to 20 times earnings of maybe $5 – which could be $75 to $100 a share. I’m selling all my BIDU from the Growth Portfolio but will keep it on my radar and probably get back in after the dust settles. |
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| One-Year Chart | ||
 Bad breakdown on the one-year chart. Estimates look terrible. Look out below. The Est LTG of 19% is good but sales rose 38% so profits should be growing faster. |
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| Earnings Table | ||
 Revenue climbed 38% last qtr but profits grew just 1% as the company spends money on other things like its video streaming unit (including investing in shows) and its online travel unit.BIDU missed by 8 cents, and these estimates have been coming down. Annual Profit Estimates are free-falling like the stock is. Qtrly profit growth looks terrible. Management needs to focus on profitability more. |
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| Fair Value | ||
 Is BIDU worth 30x earnings? Yes in a perfect world. Now the P/E could come down to 20. |
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| Ten-Year Chart | ||
 This stock has gone through poor periods in the past. I’ve actually bought the stock at $9 in 2006, then sold and got back in at a higher price. But now with the Chinese market crashing who knows where the bottom is. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
N/A |
I don’t agree with Baidu’s plan of spending to grow, but on the bright side the video streaming unit and online travel unit should contribute more than $500 million in sales per year (company does more than $10 billion in revenue overall). Still profit growth is being sacrificed as is the stock. |
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Aggressive Growth Portfolio
N/A |
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