NASDAQ:BIDU is an undervalued gem with solid fundamentals.

Our stock screener has singled out BAIDU INC - SPON ADR (NASDAQ:BIDU) as a stellar value proposition. NASDAQ:BIDU not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Unpacking NASDAQ:BIDU's Valuation Rating

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:BIDU was assigned a score of 7 for valuation:

• The Price/Earnings ratio is 9.29, which indicates a very decent valuation of BIDU.
• 89.55% of the companies in the same industry are more expensive than BIDU, based on the Price/Earnings ratio.
• BIDU's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.67.
• Based on the Price/Forward Earnings ratio of 8.78, the valuation of BIDU can be described as reasonable.
• Based on the Price/Forward Earnings ratio, BIDU is valued cheaper than 86.57% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of BIDU to the average of the S&P500 Index (20.15), we can say BIDU is valued rather cheaply.
• 97.01% of the companies in the same industry are more expensive than BIDU, based on the Enterprise Value to EBITDA ratio.
• 97.01% of the companies in the same industry are more expensive than BIDU, based on the Price/Free Cash Flow ratio.
• BIDU has a very decent profitability rating, which may justify a higher PE ratio.

Evaluating Profitability: NASDAQ:BIDU

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:BIDU has earned a 6 out of 10:

• The Return On Assets of BIDU (4.63%) is better than 76.12% of its industry peers.
• The Return On Equity of BIDU (7.75%) is better than 79.10% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 5.10%, BIDU is in the better half of the industry, outperforming 79.10% of the companies in the same industry.
• The 3 year average ROIC (3.96%) for BIDU is below the current ROIC(5.10%), indicating increased profibility in the last year.
• BIDU has a Profit Margin of 14.24%. This is in the better half of the industry: BIDU outperforms 79.10% of its industry peers.
• With an excellent Operating Margin value of 16.57%, BIDU belongs to the best of the industry, outperforming 83.58% of the companies in the same industry.

Analyzing Health Metrics

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:BIDU was assigned a score of 5 for health:

• BIDU has a debt to FCF ratio of 2.20. This is a good value and a sign of high solvency as BIDU would need 2.20 years to pay back of all of its debts.
• BIDU has a Debt to FCF ratio of 2.20. This is in the better half of the industry: BIDU outperforms 73.13% of its industry peers.
• BIDU has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
• Although BIDU does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• BIDU has a Current Ratio of 2.79. This indicates that BIDU is financially healthy and has no problem in meeting its short term obligations.
• A Quick Ratio of 2.79 indicates that BIDU has no problem at all paying its short term obligations.

Growth Analysis for NASDAQ:BIDU

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:BIDU has achieved a 6 out of 10:

• BIDU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 32.24%, which is quite impressive.
• Based on estimates for the next years, BIDU will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.65% on average per year.
• Based on estimates for the next years, BIDU will show a quite strong growth in Revenue. The Revenue will grow by 10.19% on average per year.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of BIDU for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.