Earnings Cheat Sheet: Up 156% In 2010 Alone, Is it Possible That Baidu.com (BIDU) Is Still Cheap?

Baidu.com (NASDAQ: BIDU), perhaps best known as being the “Google (NASDAQ: GOOG) of China,” is becoming better known for being the company that’s teaching Google a thing or two about how to run a search engine in China.  BIDU’s online-search market share in the Middle Kingdom rose to 73% during the Q, up from 70% last year, and the growth came almost entirely at the expense of Google, which saw its market share drop 260 bps to 21.6%.

Earnings: 3Q profits of CNY 1.05 billion ($156.4 million), or CNY 3 per ADS vs. CNY 492.9 million, or CNY 1.41 per ADS, during 3Q09.

Revenue: Up 76% YoY to CNY 2.26 billion.

Actual vs. Wall St. Expectations: BIDU beat on EPS, coming in well ahead of expectations of CNY 2.71 per ADS.  Revenue came in at the high end of July guidance of CNY 2.2 billion – CNY 2.26 billion.

Notable Stats: Active online marketing customers rose 26% YoY to 272,000 and revenue per customer rose 41% to approximately CNY 8,300 from CNY 5,900 during 3Q09.

BIDU’s capex totaled CNY 246.3 million during the quarter, a 90% rise vs. capex of CNY 129.6 million during 3Q09.

Did You Hear That? CEO Robin Li remarked during the call that, “during the third quarter both (average revenue per user) and customer base increased healthily, which directly contributed to the robust top-line increase.”

CFO Jennifer Li added that BIDU’s capex spending will, “probably be more aggressive in the near term.”

Technicals: It’s hard to find very much to nitpick about on BIDU’s chart.  It’s about as bullish as it gets without being full-on parabolic.  Periods of churning and periodic pullbacks to the 10-week moving average are signs of strength and add stability to what may be the most audacious up-move amongst large-cap names.  It’s all higher highs and lower lows for BIDU, but if you’re looking for an entry point you might as well wait for the next pullback to the 10-week line.

Commentary: BIDU is up 156% on the year, 50% since August 1st and 8.6% this month alone.  It’s the kind of growth that would make even Steve Jobs blush.  The strangest part is that, in terms of forward earnings estimates, BIDU may be relatively cheap.  BIDU is trading at 48.5X 2011 estimates, a year in which EPS is expected to grow 56.7%, and 34.5X 2012 EPS in a year where earnings are expected to grow 40.7% YoY.  In comparison, Apple (NASDAQ: AAPL) is trading at 14.04X 2012 EPS, a year in which the company is expected to grow earnings by 16.06%.

Now, we all know it’s risky to start discussing forward earnings as if they’re set in stone (which they are not, they are merely estimates), but it cannot be denied that, even after such torrid growth, BIDU may have a lot more room to run.

Disclosure: No holdings in BIDU.