Baidu Inc (ADR) Remains Best Of Breed Story: Piper Jaffray

Piper Jaffray analyst Gene Munster came out with an optimistic view on Baidu Inc (ADR) (NASDAQ:BIDU), after the company released its first-quarter results, posting revenue of $2.05 billion and PF EPS of $1.12 compared to the Street at $2.08 billion and $1.07. Second quarter revenue guidance was for $2.64-2.70 billion, compared to the Street at $2.69 billion. Baidu shares are currently trading at $198.50, down $1.78 or 0.89%.

Munster commented: “Baidu’s Q1 report and, more importantly, Q2 revenue guide, was about 1% below the Street which slightly weighed on investor concern about slowing growth from the company’s last guide, which was impacted by the timing of Chinese New Year. While the company does not give expense guidance, they maintained comments from the Dec-14 call to expect R&D expense as a percent of revenue to “continue to edge up”.”

“While we believe that prior concerns around competition and mobile distribution have not been eliminated, Baidu remains a best of breed story with minimal competitive threat. Moving forward to the next year, we believe momentum from mobile and potentially some small margin upside will return.”, the analyst added.

The analyst maintained an Overweight rating on BIDU with a price target of $230, which implies an upside of 16% from current levels.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a total average return of 27.0% and a 67.6% success rate. Munster has a 60.3% average return when recommending BIDU, and is ranked #1 out of 3587 analysts.

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