NASDAQ:BIDU is probably undervalued for the fundamentals it is displaying.

BAIDU INC - SPON ADR (NASDAQ:BIDU) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NASDAQ:BIDU showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Evaluating Valuation: NASDAQ:BIDU

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:BIDU, the assigned 7 reflects its valuation:

• The Price/Earnings ratio is 7.76, which indicates a rather cheap valuation of BIDU.
• Compared to the rest of the industry, the Price/Earnings ratio of BIDU indicates a rather cheap valuation: BIDU is cheaper than 91.30% of the companies listed in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 28.86, BIDU is valued rather cheaply.
• With a Price/Forward Earnings ratio of 7.49, the valuation of BIDU can be described as very cheap.
• Based on the Price/Forward Earnings ratio, BIDU is valued cheaper than 89.86% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 20.69. BIDU is valued rather cheaply when compared to this.
• Based on the Price/Free Cash Flow ratio, BIDU is valued cheaper than 97.10% of the companies in the same industry.
• The decent profitability rating of BIDU may justify a higher PE ratio.

What does the Profitability looks like for 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:

• With a decent Return On Assets value of 4.63%, BIDU is doing good in the industry, outperforming 76.81% of the companies in the same industry.
• BIDU's Return On Equity of 7.75% is fine compared to the rest of the industry. BIDU outperforms 78.26% of its industry peers.
• The Return On Invested Capital of BIDU (5.10%) is better than 79.71% of its industry peers.
• The last Return On Invested Capital (5.10%) for BIDU is above the 3 year average (3.96%), which is a sign of increasing profitability.
• BIDU has a Profit Margin of 14.24%. This is amongst the best in the industry. BIDU outperforms 81.16% of its industry peers.
• The Operating Margin of BIDU (16.57%) is better than 84.06% of its industry peers.

Assessing Health for NASDAQ:BIDU

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:BIDU has received a 5 out of 10:

• The Debt to FCF ratio of BIDU is 2.20, which is a good value as it means it would take BIDU, 2.20 years of fcf income to pay off all of its debts.
• With a decent Debt to FCF ratio value of 2.20, BIDU is doing good in the industry, outperforming 73.91% of the companies in the same industry.
• 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.
• A Current Ratio of 2.79 indicates that BIDU has no problem at all paying its short term obligations.
• BIDU has a better Current ratio (2.79) than 63.77% of its industry peers.
• A Quick Ratio of 2.79 indicates that BIDU has no problem at all paying its short term obligations.
• BIDU has a Quick ratio of 2.79. This is in the better half of the industry: BIDU outperforms 63.77% of its industry peers.

Unpacking NASDAQ:BIDU's Growth Rating

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:BIDU has earned a 5 for growth:

• The Earnings Per Share has grown by an impressive 32.22% over the past year.
• The Earnings Per Share is expected to grow by 10.44% on average over the next years. This is quite good.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of BIDU

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.