Below are key drivers of Baidu's value that present opportunities for upside or downside to the current Trefis price estimate for Baidu:
For additional details, select a driver above or select a division from the interactive Trefis split for Baidu at the top of the page.
Touted as the Google of China, Baidu is the number one Chinese language search provider and the most trafficked website in China. Baidu's main search operation provides search for websites, audio files, and images.
Baidu offers a unique Chinese language search platform to both users and customers. This platform consists of its own websites as well as the Baidu Union, a network of third-party websites and software applications. By generating traffic from its users, Baidu is able to attract business customers that wish to advertise their products and services alongside Baidu's search results and on Baidu's web properties.
Baidu makes the majority of its money from its search operations. Baidu's search advertising business is driven by two important factors that contribute to its significance:
Baidu dominates the search advertising market in China, with an estimated market share of over 80% (by revenue).
Though Qihoo 360 and Sogou have emerged as credible players in the desktop online search market, Baidu has gained dominance over the country's mobile search market. Baidu also competes with Bing and Google China in the domestic search market.
Demand from online advertisers for keyword advertising on Baidu sites could continue to cause upward pressure on Baidu's Revenue per Search.
The Internet penetration rate has steadily increased from 19% in 2008 to over 55% in 2018. China’s Internet penetration rate remains low compared to developed countries (for example, the U.S, U.K, France and Japan have penetration rates of over 85%).
Relatively low penetration rates translate into better opportunities for growth as the user base still remains low compared to the total population of the state.
Chinese Online video market has exploded in recent years driven by increasing penetration of smartphone users as well as high speed internet in the region. This is expected to continue to drive iQiyi online video streaming revenues in the coming years.
Baidu’s market share in desktop searches has decreased in recent years, as Qihoo 360 and Sogou have seen significant gains. Nevertheless, Baidu has been able to retain its dominance over the mobile search market (commanding more than 80% market share). Yet Qihoo 360 is taking aggressive measures to increase its share in the mobile search market. If it does so, it could make a serious dent in Baidu’s market leadership. Additionally, since Qihoo and Sogou are ramping up their search monetization, this could also impact Baidu’s ability to raise prices on ad units.
Driven by rising adoption of mobile Internet and smartphones, Baidu's mobile search users are growing explosively. This has also contributed to increased monetization on the mobile platform.
Mobile revenue now comprises over 50% of overall revenues, as mobile search now accounts for over two-thirds of overall search traffic on Baidu, and its mobile monetization rate has improved over the past few quarters
Baidu aims to fuel the next chapter of its growth with O2O e-commerce initiatives. These include services to connect users to merchants such as online travel, ticket booking, entertainment, food delivery, as well as grocery and other services. The company’s management expects this to be a RMB 10 trillion market opportunity.
Baidu's (NASDAQ:BIDU) stock has fallen from an all-time high of over $280 a share roughly a year ago to around $100 due to a combination of slowing economic conditions in China, continuing headwinds from the U.S.-China trade war, as well as a sharp decline in Baidu's core search-related revenues. ...More
Baidu (NASDAQ:BIDU) announced its Q1 results late last week, with the Chinese technology reporting its first quarterly loss in fifteen years, even as revenues came in line with expectations. Baidu's weak revenue outlook coupled with the unexpected loss led the company's stock almost 17% lower within hours of the earnings announcement. ...More
Baidu (NASDAQ:BIDU) reports its Q1 results on May 16. The company had beat consensus expectations on revenue and EPS in Q4. We will be looking for commentary around progress in the management’s aim of increasing the amount of artificial intelligence component in its products, as this should allow the company to offer services that are more aligned with consumer preferences while also re... ...More
With expectations of the U.S-China trade dispute trending towards a resolution, Chinese stocks have rallied this year. Post Baidu's (NASDAQ:BIDU) Q4 results on February 21, we noted that management’s focus on driving AI across its portfolio of offerings and sustained traction in the company’s digital content and self-driving businesses appear to be becoming tailwinds to Baidu’s lead... ...More
Baidu (NASDAQ:BIDU) reported its fourth quarter and full-year results on February 21. The company beat consensus revenue and EPS estimates. As indicated by an internal memo in January, Baidu crossed RMB 100 billion in revenue for 2018 with total revenue coming in RMB 102.7 billion ($14.9 billion, +28% y-o-y), with 856K active online marketing customers (+10% y-o-y). ...More
Baidu (NASDAQ:BIDU) is expected to report its fourth quarter and full-year results early next week. Based on an internal memo (and filed as a 6K) circulated by the company’s CEO in early January, the company’s revenue for 2018 is likely to come in excess of RMB 100 billion. ...More
The ongoing China - U.S. trade dispute has caused most Chinese stocks to fall, and Baidu (NASDAQ:BIDU) is no exception. The company's stock has traded down nearly 10% since December 3, and is down nearly 35% in the past six months. ...More
Baidu (NASDAQ:BIDU) recently announced its third quarter earnings, reporting a 27% increase in net revenue to ¥28.2 billion ($4.1 billion) for the quarter. Growth came from both the Baidu Core segment (+25%) as well as iQiyi (48%). Despite strong revenue growth, the company's adjusted EBITDA stood at ¥6. ...More
Baidu (NASDAQ:BIDU) recently announced its second quarter earnings, reporting a 24% increase in net revenue to ¥25.9 billion ($3.8 billion) for the quarter. Growth came from both Baidu Core segment (+18%) as well as iQiyi (64%). ...More
Baidu (NASDAQ:BIDU) is scheduled to announce its second quarter earnings on July 31. The company reported a strong 20% increase in net revenue to RMB 84.8 billion ($13 billion) through 2017. This trend continued in the March quarter, with a 24% increase in net revenue to RMB 20.9 billion ($3. ...More
Baidu (NASDAQ:BIDU) recently announced its Q1 earnings, reporting a 24% increase in net revenue to RMB 20.9 billion ($3.3 billion) for the March quarter. Strong revenue growth was complemented by a massive 103% increase in the company's operating income (non-GAAP) to RMB 5.3 billion ($852 million), with non-GAAP operating margin expanding by 9 percentage points to 26%. ...More
Baidu (NASDAQ:BIDU) is scheduled to announce its Q1 earnings on April 26. The company reported a 20% increase in net revenue to RMB 84.8 billion ($13 billion) through 2017. Strong revenue growth was complemented by a massive 55% increase in the company's operating income to RMB 15.7 billion ($2. ...More
Baidu (NASDAQ:BIDU) announced its Q4 and full year earnings on February 13, reporting a nearly 30% increase in net revenue to RMB 23.6 billion. The internet giant reported a solid 17% growth in revenues to RMB 61.3 billion ($9.3 billion) through the first three quarters of the year. Strong revenue growth was complemented by a similar improvement in the company's operating income. ...More
Baidu (NASDAQ:BIDU) is scheduled to announce its Q4 and full year earnings on February 13. The internet giant reported a solid 17% growth in revenues to RMB 61.3 billion ($9.3 billion) through the first three quarters of the year. ...More
Like most large internet companies, Baidu (NASDAQ:BIDU) has had a solid year thus far, with strong revenue growth and healthier margins. Baidu's core search and transaction services businesses have grown considerably this year, complemented by robust growth at online video streaming business iQiyi. ...More
Like most internet companies, Baidu (NASDAQ:BIDU) has been a high-growth stock this year. Baidu's stock price consistently rose from $165 at the beginning of the year to $270 in October, before falling to $235 currently. The company has reported strong revenue growth in recent quarters, complemented by limiting growth in operating expenses. ...More
Baidu (NASDAQ:BIDU) announced its Q3 2017 earnings on October 26, reporting a 29% year-over-year increase in net revenues to RMB 23.5 billion ($3.5 billion). ...More
Baidu (NASDAQ:BIDU) is scheduled to announced its Q3 results on October 26. The company has witnessed strong growth in its transaction services and online video streaming businesses in recent quarters, while its core search services business has slowed down. ...More
Baidu (NASDAQ:BIDU) announced its Q2 2017 earnings on Thursday, July 27, reporting a 14% year-over-year increase in net revenues to RMB 20.9 billion. Strong revenue growth was complemented by a significant improvement in the company's operating income, as shown below. ...More
Baidu (NASDAQ:BIDU) is scheduled to announced its Q2 results on Thursday, July 27. ((Baidu to Report Second Quarter 2017 Financial Results on July 27, 2017, Baidu Press Release, July 2017)) The company has witnessed strong growth in its transaction services and onlin... ...More