Baidu (BIDU) Potential Small Upside After Its Release

$Baidu(BIDU)$ is expected to release earnings on 28 Feb 2024 before the market opens (BMO).

Baidu has had a rough three months with its share price down 10%. However if we look into the price volatiltiy for Baidu compared to the industry, we could see that it has not had significant price volatility in the past 3 months .BIDU's weekly volatility (5%) has been stable over the past year.

Baidu (BIDU) Last Reported Earnings

BIDU last reported earnings on 21 NOv 2023 before the market opened (BMO). BIDU shares gained +1.9% the day following the earnings announcement to close at 113.42. Following its earnings release, 96 days ago, BIDU stock has drifted -1.8% lower.

From the time it announced earnings, BIDU traded in a range between 97.51 and 126.23. The last price (111.36) is closer to the lower end of range.

Estimated implied straddle for upcoming earnings is 7.7%. If we looked at how Baidu has performed in the past, we could be seeing a rather flat change post earnings for Baidu.

We need to study the company's financials to determine if they have got anything to do with the price decline. Stock prices are usually driven by a company’s financial performance over the long term, So I will be looking at it PE Ratio.

Price to Earnings Ratio vs Fair Ratio

What is BIDU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors. BIDU is good value based on its Price-To-Earnings Ratio (12.7x) compared to the estimated Fair Price-To-Earnings Ratio (21x).

If we looked at how Baidu PE ratio compared to its peers, we could see that BIDU is good value based on its Price-To-Earnings Ratio (12.7x) compared to the peer average (43.8x).

Summary

If we looked beyond how Baidu have been performing recently, we could see that Baidu still have a pretty decent potential based on its PE ratio, and their stock price volatilty is also stable.

I would think that Baidu should be able to give us a positive price change post earnings and we should see Baidu moving upside as recovery in China start to pick up.

Appreciate if you could share your thoughts in the comment section whether you think Apple would be able to recover its position and move above the 50-Day period after its iPhone 15 launch.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.