Growth is decelerating at Baidu (Nasdaq: BIDU ) , but it's probably still fast enough to outrun most of the stocks in your portfolio.
The beleaguered Chinese search engine posted reasonable fourth-quarter results last night. Revenue soared 58% to $132.2 million. Earnings could only meet the top-line growth halfway, climbing 31% to $1.31 a share.
Those numbers could have been worse. After a November expose aired on Chinese television, calling out Baidu for allowing unlicensed medical companies to advertise on its site, things could have gotten hairy. Baidu commands most of China's search engine traffic, but this could have been the golden opportunity for Google (Nasdaq: GOOG ) , Yahoo! (Nasdaq: YHOO ) , or a smaller homegrown engine like Sohu.com's (Nasdaq: SOHU ) Sogou to swipe away market share. Between the company's perceived integrity by Baidu users and advertisers responding to tighter ad standards, it could have catastrophic.
So far, so good, though investors will want to see what the current quarter has to offer, since the event took place midway through the fourth quarter.
Baidu sees $114 million to $117 million in revenue for this year's first quarter. It's a sequential dip, but an enviable 36% to 39% spurt from where its top line was a year earlier.
The near term can certainly get bumpy, but Baidu is attractively priced these days. It is now fetching less than 30 times trailing earnings, and even less if you back out the roughly $11.20 in cash equivalents on the company's balance sheet.
There is no shortage of Chinese growth stocks like Ctrip.com (Nasdaq: CTRP ) , New Oriental Education (NYSE: EDU ) , and The9 (Nasdaq: NCTY ) trading for lower multiples, but it's hard to ignore Baidu when it's still on top of its lucrative niche.
Baidu isn't the speedster it used to be, but everyone else is still staring at its backside.
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