Baidu (BIDU) AI Stock Analysis

• Market Cap: $30.91B
• Dividend Yield: N/A
• Average Volume (3M): 2.29M
• Price to Earnings (P/E): 8.5
• Beta (1Y): 1.08
• Revenue Growth: -1.33%
• EPS Growth: 32.92%
• Country: US
• Employees: 35,900
• Sector: Communication Services
• Sector Strength: 87
• Industry: Internet Content & Information
• EPS (TTM): 2.59
• Shares Outstanding: 278,228,360
• 10 Day Avg. Volume: 2,167,849
• 30 Day Avg. Volume: 2,287,442
• PEG Ratio: 1.23
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 129.07
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $103.09
• Price Target Upside: 20.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 74 Outperform
• Price Target: $97.00 ▲(12.96%Upside)

Baidu's overall stock score reflects strong financial performance and attractive valuation. The significant growth in AI Cloud and strategic investments in AI and autonomous driving are positive indicators for future growth. These strengths are balanced by decreased cash flow and challenges in online marketing revenue, resulting in a moderate technical outlook.

Positive Factors

AI Cloud Growth

AI cloud business experienced strong growth, increasing about 42% year over year.

Robotaxi Expansion

The robotaxi business has achieved 100% fully driverless operations in Mainland China and is expanding internationally.

Share Buyback

Baidu increased its share buyback program, which suggests a potential 6% annual yield at the current market cap.

Negative Factors

Advertising Revenue Decline

The decline in advertising revenue is expected to accelerate as the company increases the use of AI search results.

Monetization Uncertainty

Current monetization of Baidu's AI search is limited and still undergoing trial and error, with timing and efficiency of monetization still unclear.

Operational Margin Pressure

Investment in AI and negative impact on search ad revs disruption will weigh on Baidu core OpM in coming quarters.

Baidu Business Overview & Revenue Model

Company Description

Baidu, Inc. provides online marketing and cloud services through an internet platform in the People's Republic of China. It operates in two segments, Baidu Core and iQIYI. The Baidu Core segment offers search-based, feed-based, and other online marketing services; cloud services; and products and other services from AI initiatives. This segment also operates Haokan, a user generated and professionally produced short videos platform. The iQIYI segment operates an online entertainment video platform that offers original, professionally produced, and partner-generated content. The company was incorporated in 2000 and is headquartered in Beijing, the People's Republic of China.

How the Company Makes Money

Baidu generates revenue through several key streams. The primary source is online marketing services, where the company earns money by providing advertising and marketing solutions through its search platform and other online properties. Advertisers pay Baidu to display their ads in search results and on its network of websites. Additionally, Baidu makes money from its AI Cloud services by offering cloud computing, big data, and AI products to enterprises. Another significant revenue stream is its Intelligent Driving and Autonomous Vehicles segment, which focuses on developing and commercializing self-driving technologies and services. Partnerships with government bodies and other tech companies also contribute to Baidu's earnings, enhancing its capabilities in areas like smart cities and autonomous driving.

Baidu Financial Statement Overview

Summary

Baidu demonstrates strong financial recovery with robust revenue growth and improved margins. The income statement is solid with high profit margins, and the balance sheet shows stability with moderate leverage. However, cash flow generation has decreased, indicating some challenges.

Income Statement

Baidu's income statement shows robust performance with a strong TTM gross profit margin of 49.05% and a net profit margin of 19.41%. The company has demonstrated a healthy revenue growth trajectory, with a notable recovery from previous losses, as seen in the EBIT margin turning positive. This indicates improved operational efficiency. However, the gross profit margin slightly decreased compared to the previous year, which might suggest rising costs or competitive pricing pressure.

Balance Sheet

The balance sheet reflects a solid financial position, with a debt-to-equity ratio of 0.38, indicating moderate leverage. The equity ratio stands at 59.42%, showcasing stability and a strong equity base. Although there is a slight increase in total debt, the company's equity growth keeps the leverage at manageable levels. Return on equity improved significantly to 9.65%, aligning with the company's profitability recovery.

Cash Flow

Baidu's cash flow statement reveals some challenges, with a lower free cash flow generation compared to previous periods, primarily due to reduced operating cash flow. The operating cash flow to net income ratio of 0.35 suggests efficient conversion of profits into cash but indicates a decrease from prior periods. The free cash flow to net income ratio of 0.06 highlights a reliance on operating performance for cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	134.06B	133.13B	134.60B	123.67B	124.49B	107.07B
Gross Profit	65.77B	67.02B	69.57B	59.74B	60.18B	51.92B
EBITDA	34.11B	35.95B	36.53B	14.51B	14.10B	14.34B
Net Income	26.03B	23.76B	20.32B	7.56B	7.59B	22.47B
Balance Sheet
Total Assets	453.98B	427.78B	406.76B	390.97B	380.03B	332.71B
Cash, Cash Equivalents and Short-Term Investments	141.77B	127.44B	193.90B	174.00B	180.09B	162.18B
Total Debt	102.05B	79.32B	84.59B	91.35B	91.51B	82.59B
Total Liabilities	163.91B	144.17B	144.15B	153.17B	156.08B	140.87B
Stockholders Equity	269.75B	263.62B	243.63B	223.48B	211.46B	182.70B
Cash Flow
Free Cash Flow	1.66B	13.10B	25.32B	17.78B	8.88B	18.87B
Operating Cash Flow	9.01B	21.23B	36.62B	26.17B	20.12B	24.20B
Investing Cash Flow	-6.64B	-8.55B	-50.40B	-3.94B	-31.44B	-27.55B
Financing Cash Flow	4.35B	-13.76B	-14.16B	-6.39B	23.40B	5.67B

Baidu Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 85.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BIDU, the sentiment is Negative. The current price of 85.87 is below the 20-day moving average (MA) of 86.61, below the 50-day MA of 86.93, and below the 200-day MA of 89.35, indicating a bearish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 46.21 is Neutral, neither overbought nor oversold. The STOCH value of 35.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BIDU.

Baidu Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOGL	83 Outperform	$2.19T	20.09	34.79%	0.47%	13.02%	37.73%
META	82 Outperform	$1.80T	27.99	39.83%	0.29%	19.37%	47.56%
GOOG	81 Outperform	$2.19T	20.22	34.79%	0.46%	13.02%	37.73%
SPOT	76 Outperform	$142.39B	115.94	24.28%	―	16.07%	―
BIDU	74 Outperform	$30.91B	8.51	9.85%	―	-1.33%	32.92%
TME	72 Outperform	$29.89B	23.11	14.37%	0.91%	4.59%	83.27%
Sector *	61 Neutral	$40.74B	-1.35	-12.05%	3.97%	2.04%	-69.68%