Baidu, Inc. (NASDAQ: BIDU)
Financial Analysis | April 21, 2025
Company Overview
Baidu is China’s leading search engine and AI company, founded in 2000. Beyond core search and advertising, Baidu has invested heavily in AI/cloud services, autonomous driving (Apollo), and smart devices (DuerOS). Its AI initiatives underpin growth as China accelerates digital transformation.
Key Statistics
Market Cap
$28.39Â B
Revenue (TTM)
$18.24Â B
Net Income (TTM)
$3.17Â B
Shares Out.
343.77Â M
EPS (TTM)
$9.04
P/E Ratio
9.14
Forward P/E
8.09
Beta
0.32
Earnings Date
May 15, 2025
Baidu trades at a single‑digit P/E, reflecting market skepticism around ad spending cycles. However, robust free cash flow and a growing AI/cloud segment support a more constructive valuation thesis.
Quarterly Revenue & Net Income
Revenue has been stable around $134 B each quarter, while net income rose from $19.94 B in Q1 2024 to $23.76 B in Q4 2024. This reflects cost controls and growth in higher‑margin AI and cloud services offsetting ad market fluctuations.
Margin Trends
Gross margins slipped from ~52% to ~50%, due to mix shifts and investments in cloud infrastructure. Profit margins expanded from ~14% to ~17%, driven by operating leverage in AI and cost optimization.
Valuation Metrics
At a forward P/E of ~8 and PEG of ~2, Baidu appears undervalued relative to growth potential in AI/cloud and autonomous driving—key catalysts over the next 12–24 months.
Balance Sheet Snapshot
With $17.5Â B cash and $10.9Â B debt, Baidu holds net cash of ~$6.6Â B. This strong liquidity underpins R&D in AI and supports shareholder returns via buybacks.
52‑Week Stock Performance
The stock ranged between $74.7 and $116.3 over the past year, settling near $82.6. Low beta (~0.3) suggests defensive characteristics amidst tech volatility.
Risks & Opportunities
Risks
Reliance on ad revenue; macro downturns can compress demand.
Regulatory scrutiny and data‑privacy regulations in China.
Intense competition from Alibaba, Tencent, and ByteDance.
Opportunities
AI/cloud growth from enterprise digital transformation.
Monetization of autonomous driving platform (Apollo).
New consumer AI services and smart devices adoption.
Conclusion
Baidu’s stable core business, underpinned by a strong balance sheet and expanding AI/cloud initiatives, supports a bullish long‑term thesis despite near‑term ad market cyclicality. At current valuations, the risk/reward favors patient investors.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence or consult a licensed financial advisor.
