Chalk up another believer in Baidu (Nasdaq: BIDU).

Macquarie Research initiated coverage of China's leading search engine with an "outperform" rating. The firm also set a price target of $138.

Analysts have been kind to Baidu in recent months, jacking up their expectations as the shares inch higher. Pacific Crest analyst Steve Weinstein dramatically bumped his price target higher -- from $80 to $140 -- four months ago. ThinkEquity also recently boosted its target to $135.

Why is Macquarie initiating coverage at a price point that implies a whopping 58 times forward earnings? Why are Pacific Crest and ThinkEquity inching their goals higher instead of cashing out and laughing all the way to the bank?

Maybe they see what's coming. Baidu steps back up to the earnings stage next week. The Chinese dot-com darling has a funny way of landing ahead of its prognosticators:

Time Frame

EPS est.

Actual

Q4 2009 $0.17 $0.18
Q1 2010 $0.15 $0.20
Q2 2010 $0.31 $0.35
Q3 2010 $0.42 $0.45

Source: Yahoo! Finance.

If history's any indicator, there's a pretty good chance that Baidu will keep its streak of market-thumping quarters going this time around.

Baidu remains the undisputed paid-search champ in China. Google's (Nasdaq: GOOG) partial retreat last year didn't really open the distant silver-medalist position to Microsoft's (Nasdaq: MSFT) Bing or Sohu.com's (Nasdaq: SOHU) Sogou. Baidu has only padded its lead over the past year. A quasi-passive Google remains far behind in second place. Bing is hoping to broker deals in China to raise brand awareness, but it has a lot of ground to make up. Sohu posted a huge 134% year-over-year gain in search revenue in its latest quarter, but it's still a small fry in Baidu's playground.

Baidu may not seem cheap. It closed last night at 45 times this new year's projected profitability. It's obviously a rich multiple, but the catch is that Baidu is growing even faster.

There will always be risks in China. The booming economy may overheat. The government may take an even more restrictive approach to Internet usage. However, those same factors can also take bullish turns.

Baidu's cheaper than the cynics think. Now one more analyst agrees.

Do you think Baidu is a good buy at this point? Share your thoughts in the comment box below.

Google and Microsoft are Motley Fool Inside Value picks. Baidu, Google, and Sohu.com are Motley Fool Rule Breakers recommendations. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz has only been to China once, but he relishes admiring its dot-com revolution from afar. He does not own shares in any of the stocks in this article. He 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.