NASDAQ:BIDU, an undervalued stock with good fundamentals.

Our stock screening tool has pinpointed BAIDU INC - SPON ADR (NASDAQ:BIDU) as an undervalued stock option. NASDAQ:BIDU retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Valuation Examination for 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 7.28, which indicates a rather cheap valuation of BIDU.
• 89.86% 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 29.34.
• BIDU is valuated cheaply with a Price/Forward Earnings ratio of 7.27.
• BIDU's Price/Forward Earnings ratio is rather cheap when compared to the industry. BIDU is cheaper than 86.96% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of BIDU to the average of the S&P500 Index (20.80), we can say BIDU is valued rather cheaply.
• Based on the Price/Free Cash Flow ratio, BIDU is valued cheaper than 95.65% of the companies in the same industry.
• BIDU has a very decent profitability rating, which may justify a higher PE ratio.

Analyzing Profitability Metrics

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:BIDU was assigned a score of 6 for profitability:

• The Return On Assets of BIDU (4.63%) is better than 75.36% of its industry peers.
• BIDU's Return On Equity of 7.75% is fine compared to the rest of the industry. BIDU outperforms 76.81% of its industry peers.
• BIDU has a better Return On Invested Capital (5.10%) 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.
• BIDU's Operating Margin of 16.57% is amongst the best of the industry. BIDU outperforms 84.06% of its industry peers.

How We Gauge Health for NASDAQ:BIDU

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:BIDU, the assigned 5 for health provides valuable insights:

• 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's Debt to FCF ratio of 2.20 is fine compared to the rest of the industry. BIDU outperforms 73.91% of its industry peers.
• A Debt/Equity ratio of 0.29 indicates that BIDU is not too dependend on debt financing.
• 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 Current ratio of 2.79. This is in the better half of the industry: BIDU outperforms 60.87% of its industry peers.
• BIDU has a Quick Ratio of 2.79. This indicates that BIDU is financially healthy and has no problem in meeting its short term obligations.
• BIDU has a better Quick ratio (2.79) than 60.87% of its industry peers.

What does the Growth looks like for NASDAQ:BIDU

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:BIDU boasts a 5 out of 10:

• BIDU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 32.22%, which is quite impressive.
• The Earnings Per Share is expected to grow by 10.44% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
• 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.

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

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.