3 Key Drivers To Baidu's Stock Value
We recently initiated coverage on Baidu (BIDU) with a $134 Trefis price estimate, which is largely in line with our current market price. We estimate that Baidu has nearly 80% market share in the rapidly growing Internet search market in China where the company faces modest competition from foreign competitors like Google (GOOG) which was formally barred from China, Yahoo (YHOO) and Microsoft’s (MSFT) Bing. You can see our launch article titled Baidu New Coverage: $134 Trefis Price Estimate. Below we highlight the three most important drivers of Baidu’s value.
(Chart created by using Trefis'
1) Baidu’s Revenue per Search
Baidu’s Revenue per search represents the average advertising revenue generated by Baidu for every 1,000 searches conducted on Baidu.com. Revenue per search is primarily a function of the click through rate on ads placed alongside search results, as well as the price paid by advertisers for every user click,Complete Story »