BIDU
Baidu, Inc.
$105.34
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 3.4% above fair value
You pay
$105.34
Bear
$81.50
Fair
$101.88
Bull
$122.26
Bear
$81.50
-22.6%
$5.32 × 12x P/E
Fair
$101.88
-3.3%
$5.32 × 15x P/E
Bull
$122.26
+16.1%
$5.32 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
19.8x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $143.00 from 53 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $101.88 per share.
Warnings
The company's reported profits differ from official accounting profits by 206%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $143.00 (from 53 analysts). Our estimate is 44% below the consensus -- consider that gap carefully.
Financial statements were converted from CNY into USD using USDCNY at 0.1477 USD per CNY.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples