BIDU - Baidu: Very Deep Safety Margin
2024-06-22 00:40:27 ET
Summary
- Baidu is a profitable Chinese tech investment with strong earnings, generating free cash flow for potential stock buybacks or business investments.
- iQIYI, Baidu's video platform, is contributing positively to Baidu's free cash flow. The firm could also become a capital return play for investors.
- Baidu's low valuation, similar to Alibaba, presents an undervalued investment opportunity.
- Current valuation implies a massive 14% earnings yield.
- As catalyst for a revaluation I see growing strength in digital marketing, potential for accelerated stock buybacks or a dividend introduction.
Baidu ( BIDU ) is a highly profitable Chinese large-cap investment in the tech industry. Although Baidu delivered a decent earnings sheet for the first fiscal quarter, persistent investor skepticism with regard to Chinese tech companies continues to prevent a revaluation of Baidu’s shares. Baidu saw continual recovery gains in the digital advertising market in Q1'24 and is generating a ton of free cash flow, which in part is now being contributed by the company's popular video streaming platform iQIYI. The company's significant free cash flow, continual core business growth and potential for stock buybacks makes Baidu an attractive long term bet!...
Baidu: Very Deep Safety Margin