Can this be right? Not one -- but two -- major analysts are hopping on the Baidu (NASDAQ:BIDU) bandwagon this month.

Deutsche Bank analyst Alan Hellawell initiated coverage on China's leading search engine this morning, tapping Baidu with a "buy" rating. He has a modest price target of $211 on the stock but offers up an upbeat scenario where a valuation as rich as $432 a share may be justified.

Deutsche Bank joins Citigroup, which bumped its rating from "sell" to "buy" three weeks ago.

Is Wall Street late to the bounce-back party? Given this morning's pop on Hellawell's upbeat outlook, Baidu's stock has nearly doubled off of its December low.

However, let's take a closer look at Baidu. It is the market leader in a country that is essentially a search duopoly, with Baidu and distant silver-medalist Google (NASDAQ:GOOG) commanding roughly 90% of the market. Hellawell sees the market sustaining an average annual growth rate of 37% through at least 2012.

Growth ain't cheap
Growth is important because Baidu certainly doesn't seem cheap if you value it in a vacuum. Based on its close of $182.60 last night, Baidu is fetching 33 times this year's projected profitability and 25 times next year's bottom line estimate.

Those aren't low multiples, but they are certainly lower than the company's historic growth rate, as well as the rate that Hellawell sees the Chinese search market growing.

The key isn't necessarily online advertising itself in China. Brand advertising specialists like SINA (NASDAQ:SINA) and Focus Media (NASDAQ:FMCN) have recently spooked the market with their uninspiring guidance. It's not all that different than the U.S. market, where paid search leader Google is holding up better than display advertising heavies like Yahoo! (NASDAQ:YHOO) and ValueClick (NASDAQ:VCLK).

Baidu is apparently in the right niche, even if it doesn't feel like the right industry. However, it also appears to be in the right country, given China's early stage migration online.

Baidu will always be susceptible to a shift in government policy or even a shift in consumer trends to alternate search engines, but it's hard to ignore the flag-planting leader in this hot industry.

"Don't bury Baidu yet," I argued in covering last month's quarterly results. One can argue that I may be a bit of a cheerleader, especially since recommending the stock to Motley Fool Rule Breakers subscribers nearly three years ago when it was trading in the double digits. However, clearly I'm not alone these days. Citi, Deutsche Bank, and Mr. Market himself have been trading in shovels for party hats.

It's a good look.

Other recent Baidu headlines:

Focus Media is a Motley Fool Global Gains pick. Baidu, Focus Media, and Google are Motley Fool Rule Breakers recommendations. Sina is a Motley Fool Stock Advisor recommendation. 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 in the future. 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.