Investors may want to bet on Baidu Inc., as it has recently been upgraded to No. 2 (Buy) by Zacks Ratings. This upgrade reflects primarily an upward trend in estimates of earnings, which is one of the strongest forces affecting stock prices.
The only determinant of the Zacks rating is the changing picture of a company's earnings. The Zacks Average Estimate - the average of the sell-side analysts' earnings per share forecasts for the portfolio - is monitored by the program for the present and subsequent years.
The Zacks Rating System is very valuable to individual investors because an evolving earnings image is an important variable shaping near-term stock price changes.
Analysts can find it difficult to make decisions based on Wall Street observers' ranking changes, as they are mostly influenced by subjective factors that are impossible to see and quantify in real-time.
The Zacks Rating raise for Baidu Inc. (NASDAQ: BIDU) thus represents a relatively positive outlook on its profits that could turn into buying pressure and a rise in its stock price.
Institutional investors' impact has a significant connection to this partnership, as these major practitioners utilize profits and profit forecasts to measure the market value of the shares of a business.
The improvement in the future earnings prospects of a firm, as expressed in changes in the forecast of profits, and it's stock's near-term price movement are shown to be closely associated.
The Zacks Rank stock-rating system, which utilizes four earnings-related factors to rank stocks into five categories, ranging from Zacks Rank No. 1 (Strong Buy) to Zacks Rank No. 5 (Strong Sell), has an outstanding publicly audited track record, with Zacks Rank No. 1 shares delivering an average annual return of more than 25 percent since 1988.
Meanwhile, stock analysts at Jefferies also upped their rating on Baidu, Inc. (NASDAQ: BIDU) from Hold to a new rating of Strong Buy.
The company has a 42.7 percent gross profit margin, with its operating margin of around 9.7 percent. Alongside this, the company's net profit margin currently stands at 15.6 percent.
Past records have indicated that Baidu, Inc. shares were up on 25 different earnings and analysts have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of BIDU's Q3 earnings on October 28.
Baidu, Inc. shares lost -3.63 percent or -3.91 points on October 18, 2019, to close at $103.74 with a thin volume of 2.719 million shares trading.
It opened the trading session at $107.48, the shares increased to $108.09 and dropped to $103.53, the range the stock price traded throughout the day. The company now has a $35.9 billion market cap and currently has an outstanding share of 345.84 million. In 21 trading days, Baidu, Inc. stock plunged-3.74 percent of market value.
