4 Pickup Lines for Baidu

When the market starts warming up to growth stocks again, it's hard to imagine Baidu.com (Nasdaq: BIDU  ) not getting flooded with pickup lines. Let's practice a few.

Hey, baby, what's a stock like you doing in a place like this?

Baidu's stock may be trading more than 40% off its 52-week highs, but you can't blame the company's fundamentals. Third-quarter revenue soared 85% to $135.4 million. Margins widened during the period, helping prop profits 91% higher to $1.47 a share. Analysts were only expecting earnings of $1.28 a share on $134.7 million in revenue.

China's leading search engine is a rare disappointer. It has only missed Wall Street's profit targets once since going public three years ago. And if last night's numbers look good, keep in mind that they could have been even better. Included in Baidu's bottom-line showing is a $0.14-per-share hit from losses incurred in Japan and a $0.07-a-share bite in stock-based compensation.

C'mon sugar, your place or mine?

Despite making inroads in Japan, Baidu is doing just fine in its home turf: the world's most populous nation. Can you blame it? Compare Baidu's top-line growth to how the world's top search engines are doing. Baidu's quarterly revenue grew nearly three times more than global leader Google (Nasdaq: GOOG  ) . It also grew nearly 30 times more than Yahoo!'s (Nasdaq: YHOO  ) measly 3% revenue gain.

It's all about the timing, honey. You. Me. Tonight?

The company credits the Beijing Olympics for healthy traffic. That's an encouraging sign for investors in companies like official online reporter Sohu.com (Nasdaq: SOHU  ) and airport advertiser AirMedia (Nasdaq: AMCN  ) , that should fare well when it's their turn to report their third-quarter numbers.

Just don't make the mistake of assuming that Baidu is strictly a play on what went down in China back in August. The Olympic torch may have moved on, but Baidu's still burning up. The company sees revenue growing 80% to 85% in the current quarter.

If I can't buy you a drink, cupcake, can I still get your number?

Estimating Baidu's growth is a never-ending game of revising estimates higher. That's what happens when you typically blow past Wall Street's expectations (the way Baidu has in five of the past six quarters).

Another reason why it's hard to figure Baidu out is that it's always growing in new directions. I'm not just talking about the bold attempt to take on Google and Yahoo! in Japan. The company also launched a consumer-to-consumer marketplace during the quarter. This is not an easy market to crack. Alibaba's Taobao is the market leader, and even eBay (Nasdaq: EBAY  ) was seen whimpering out of China's C2C marketplace.

Baidu's advantage is that it's already a popular draw in China. It's always on the move and -- poof -- just like that, it's blown you off and is now being chatted up a few barstools higher.

During the market lull, read up to learn more about Baidu:

Google and Baidu.com are Motley Fool Rule Breakers picks. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz has been to mainland China just once, but he's longing to brush up on Mandarin and make another go of it. He does not own shares in any of the companies mentioned in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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