Friday, April 25, 2008

Analyst take on Q1 08 - S&P Research

S&P analyst, S. Kessler, says, "BIDU posts Q1 p
er-ADS profit of $0.60 vs. $0.32, $0.08 below
our forecast. Revenues rose 108%, above our
estimate, on continuing gains in the number of
customers and revenue per client. But we have
concerns about margins, hurt by growing traffic
acquisition costs and notable spending on sales
and R&D. We are cutting our '08 per-ADS earnings
projection to $3.68 from $3.91, but raising our
'09 estimate to $6.30 from $5.88 on moderating
investment growth. Based on revised peer analysis,
we are lifting our target price to $350 from $300,
but see BIDU as overvalued at current prices."

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