Baidu has been a great stock to watch over the past several years; and now, it seems to be presenting quite the opportunity. Today, we’ll talk about what Baidu does as a company and why the company has incredibly strong growth potential. We’ll also talk a bit about entrance timing and why now may be the time to start watching the stock very closely for your entrance.
What Is Baidu And Why Will It Grow?
Baidu is a company that can best be compared to Google. The company offers China’s leading search engine with a host of services that rivals the American search giant. Baidu offers web search, video search, image search, and blog search capabilities. Like Google, it runs an online marketing service to capitalize from its incredible popularity and even offers marketing services through other distribution networks. However, there are several companies that offer these types of service; so, what makes Baidu any different than the tens or even hundreds of thousands of search engines online today?
As with Google, what really sets Baidu apart from its competition is its audience. As mentioned above, Baidu has taken the Chinese search market by storm. Not to mention, the company also offers search services to Japanese consumers and continues to work on expansion. To put their audience into perspective, Baidu handles more than 70% of all search quires that come from China. With China being one of the world’s largest markets, that’s quite a bit of searches!
Another thing that’s important to put major focus on is that the company has been working to build it’s advertisers. Currently, the company has more than 516,000 online marketing customers; and that number is growing rapidly. This has led to a very strong rating from Zacks and other analysts that look into the value proposition offered by Baidu stock.
Don’t Forget About History
Because the market tends to move in trends, it’s important to pay close attention to what companies have done throughout their history in order to get a good idea of what the company is likely to do in the future. When it comes to Baidu, their history has been nothing short of incredible. As a matter of fact, growth is really all we’ve seen. Since 2010, Baidu has had an uncanny ability to increase its annual revenue year over year; every year! Here are the annual earnings we’ve seen from Baidu since 2010…
- 2010 – $1.27 Billion
- 2011 – $2.30 Billion
- 2012 – $3.58 Billion
- 2013 – $5.28 Billion
- 2014 – $7.9 Billion
As you can see from the figures above, the company has built a track record of outstanding revenue growth; and it doesn’t look like that’s going to come to an end in 2015. As a matter of fact, this year’s Q1 results showed that revenue increased by 34% compared to the same quarter last year; coming in at just over $2 billion.
Instability In China Is Bringing The Value Of The Stock Down
Investors looking for long term gains in the stock market make an attempt to buy low and sell high; and if that’s what you plan to do, now may really be the time to look into Baidu. There’s no doubt that China’s stock market is in trouble at the moment. As a matter of fact, recently investors have watched as China’s stock market spiraled down by around 25% so far. This massive decline has also brought Baidu’s stock price down along with it. As a result, today’s lows are becoming incredible opportunities for the future. Although we’re likely to continue seeing declines in china thanks to large amounts of margin lending, we’re not likely to see too much more of a decline from the massive search giant that is Baidu. With that said, now may be the time to start looking for support in the market as Baidu is likely to see a recovery relatively soon.
Final Thoughts
Although overall declines in any market are horrible to see, it’s also important to remember that it’s during these declines that investors tend to get the best deals on stocks. With that said, China’s market declines are causing a bit of pain for Baidu at the moment. However, this isn’t likely to last forever; and considering the strength in Baidu overall, it’s only making the stock more attractive for those looking to get in on massive gains. So, throughout the rest of the year 2015, I think that Baidu is going to be an incredibly hot stock to watch!
What Do You Think?
Where do you think Baidu is headed? Let us know in the comments below!
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