Baidu Inc. (NASDAQ: BIDU) will report earnings on August 22; investors are skeptical as BIDU stock might be delisted from the U.S. exchange. The company has been facing severe issues due to increased scrutiny from the Chinese government. But the business is still growing significantly.
Baidu Inc. (BIDU Stock) – Financial Analysis
Electric Vehicle (E.V.) manufacturer BYD entered a deal with Baidu Inc. to use the Chinese tech giant’s autonomous driving technology. Also, BYD is looking to develop intelligent car software in-house. In 2023, the E.V. manufacturer agreed to use Baidu’s technology, like navigation and automated valet parking.
Per the report, the previous deal is suspended, citing the need for immediate application for self-driving technology in the E.V. mass market. U.S.-based hedge fund investors like Coatue, Tiger Global, and D1 Capital decreased their exposure to Chinese companies in Q2 2023.
Coatue Management LLC reduced its stakes in Alibaba Group Holding Ltd – ADR (NYSE: BABA) down by 2.36% at $93.46, Baidu Inc. (NASDAQ: BIDU) dropping 0.23% to $137.59, JD.Com Inc. (NASDAQ: J.D.) gaining 0.82% to $36.76, and others. The position reduction could be because the growth post-COVID has not been as expected.
Baidu Inc. (NASDAQ: BIDU) – Technical Analysis
NASDAQ: BIDU, at press time, is trading at $137.59 with a drop of 0.23%; previous close and open were at $137.91 and $135.63, respectively. The 52-week range is from $73.58 to $160.88, meaning a solid momentum will be needed to reach new highs. With an average volume of 3.01 Million shares, the market cap is $48.444 Billion.
The trailing twelve-month (ttm) price-to-earnings (P/E) ratio is 25.67, indicative of a fairly valued stock price. At the same time, the (ttm) earnings per share (EPS) is $5.36, showcasing strength. Analysts placed a 3.00 rating for Buy and estimated a price target at $188.76 with a 37.2% upside.
Baidu reported previous earnings on May 16, 2023, where the reported revenue of $4.534 Billion surpassed the expected value of $4.369 Billion by 3.76%. In comparison, the reported earnings of $2.344 per share also bet the estimated value of $1.784 by 31.36%. Despite these positive earnings, BIDU’s share price fell nearly 12% in coming sessions.
The (ttm) revenue is $126.41 Billion, and the year-over-year (YoY) quarterly revenue change is 9.60%. Operating expenses gained 7.29% to $11.01 Billion, and operating margin is 15.00%. Net income jumped by 758.29% to $5.83 Billion, and the net profit margin jumped by 701.29% to 18.70.
The subsequent earnings will be reported on August 22, 2023, where the revenue is expected to be at $4.591 Billion, and earnings should be at $2.318. BIDU stock fell 7.42% weekly and 10.11% in six months. But gained 15.76% YTD and 1.76% in a year.
Baidu Inc. (BIDU Stock) – Candle Exploration
The current price is bruising the 200EMA, also acting as a strong support. Experts feel the price could bounce off this, showcasing a trend reversal. With 50EMA ascending, a short rally can be expected. If so, the price should try to break the immediate resistance at $148.87.
If the price sustains above $148.87, it should cross R1 at $157.28 to gain momentum. This momentum could lead the stock price to cross R2 at $170.00. But if the price falls, it should be within the buying zone of $117.87. Analysts argue that the price might consolidate in a range till the earnings.
