The Road To Madness: B of A Sets $400 Price Target On Baidu (BIDU)
October 2, 2007 by Douglas A. McIntyreBank of America set a $400 price target on Chinese search engine company Baidu (BIDU), according to Minyanville. JP Morgan started the stock at "overweight". All of this noise has moved that shares up 7% today to $303 dollars and change, a 52-week high.
That puts Baidu shares up more than 200% over the last six months. The company now trades for more than 61 times sales. Over at Google (GOOG) that number is under 14x.
China madness is driving Baidu higher. Last July 25, the company announed revenue had slightly more than doubled to $53 million. Net income rose 147% to $19 million. The numbers are nice, but they demonstrate how small the revenue attached to the search market in China is.
Baidu already has competition from Google. And, it is likely that the US company is willing to spend hundreds of millions of dollars to move into first place in search in the world most populated country. That makes 61 times revenues seem fairly high.
Douglas A. McIntyre
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