I am surprised the stock is acting so well in light of the results - I would have thought a much bigger beat (3 cents on EPS and $4M on revenue) and / or guide up in guidance would be required to keep the party going, especially at this valuation, but people don't seem to care anymore. On the plus side, Google's losses are Baidu's gains, and the TAC cost improvement is impressive.
In terms of valuation, analysts had a consensus of $1.41 for 2010; this quarter was beat by 3 cents so that takes us to $1.44 with 1 quarter to go. Assuming they beat next quarter's EPS estimate by say 6 cents, we have a $1.50 EPS for the year... at $107 (premarket) we have a bargain at 71x forward estimates.
Via IBD:
- China's leading search engine continues to dominate the fast-growing and world's largest Internet market, reporting late Thursday that Q3 profit more than doubled vs. a year earlier. . Its market share has increased as Google (GOOG), the top U.S. search engine and Baidu's chief domestic rival, continues to struggle with China's government over censorship issues.
- Baidu's earnings swelled 114% to 45 cents per American depositary share. Analysts had expected 42 cents. Revenue jumped 76% to $337.2 million, beating views for $333.2 million.
- The company ended Q3 with 272,000 advertisers, up 25.9% from a year earlier and 7.1% from Q2. Revenue per customer shot up 41% from a year before.
- Baidu expects Q4 revenue of $354.2 million-$364.7 million vs. $187.3 million in Q4 2009. Analysts expect $348.5 million.
- In Q3, Baidu held a 72.9% share of China's growing multibillion-dollar paid search market, says iResearch. Google had 24.6%. Last year, Baidu had a 60% share to Google's 30%.
- Shares are up more than 147% this year, while Google is down a fraction even after reporting blowout Q3 results.
Via TheStreet.com:
- Traffic acquisition cost, or TAC, is an important metric for Baidu, measuring what the company pays partners to generate search traffic. For the latest quarter, TAC totaled $30.2 million, or 8.9% of total revenue. The ratio relative to total revenue declined on a sequential basis from 9.7% in the second quarter and on a year-over-year basis from 15.9% in the same period a year earlier, a trend the company attributed to "faster organic traffic growth."
[Jul 22, 2010: Baidu With Another Strong Quarter of Growth, Raises Guidance]
[Jan 13, 2010: Baidu Soars on Potential Pullout of Google in China]
[Oct 27, 2009: Baidu Stains the Sheets with Guidance]
[Jul 24, 2009: Baidu Blows the Door Off; Phoenix (Nest) Rising]
[Apr 27, 2009: Baidu.com Beats & Provides Nice Top Line Guidance]
[Dec 11, 2008: Baidu.com - Lowers Guidance, Stock is Up]
[Nov 18, 2008: Not a Good Week for Chinese Dot Coms]
[Oct 24, 2008: Baidu.com Crunched on China Economic Fears]
[Jul 23, 2008: Baidu.com, Amazon.com - Party Like It's 1999?]
[Jan 13, 2010: Baidu Soars on Potential Pullout of Google in China]
[Oct 27, 2009: Baidu Stains the Sheets with Guidance]
[Jul 24, 2009: Baidu Blows the Door Off; Phoenix (Nest) Rising]
[Apr 27, 2009: Baidu.com Beats & Provides Nice Top Line Guidance]
[Dec 11, 2008: Baidu.com - Lowers Guidance, Stock is Up]
[Nov 18, 2008: Not a Good Week for Chinese Dot Coms]
[Oct 24, 2008: Baidu.com Crunched on China Economic Fears]
[Jul 23, 2008: Baidu.com, Amazon.com - Party Like It's 1999?]
Long Baidu in fund; no personal position
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