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Deep Value: cash covers more than 100% of the stock price

This company holds roughly $42.30B in cash and investments — more than its entire stock-market value, based on its latest quarterly filing. You're paying very little for the actual business. Sometimes that's a genuine bargain or a takeover target, sometimes it's cheap for a reason. Not a buy signal on its own — always ask why it's this cheap.

Stock

Baidu

BIDU
29
Internet Content & Information · Communication Services
Price
$80.14
-2.42 (-2.93%)
Market Cap
$27.28B
Exchange
NASDAQ
Winston Score
29
Winston is worried
Below-average fundamentals — multiple weak pillars.
Data as of Oct 18, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Mixed
9/30
Growth
Weak
3/20
Cash Flow
Weak
0/10
Stability
Good
6/10
Valuation
Data not available
0/10
Ownership
Good
10/15
Dividends
Not counted
n/a

28 of 95 counted points = Winston Score 29. Pillars marked n/a do not apply to this company and are left out of the total.

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Share count falling — buybacks

−2.5% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 351.8M (2021) → 343.0M (2025)

§Winston Score History

The full picture

Baidu is China's largest search engine, similar to how Google works in the United States. It helps hundreds of millions of people in China find information online, and it sells advertising space to businesses that want to reach those users. Beyond search, Baidu also runs an AI cloud business, an autonomous driving unit called Apollo, and a smart speaker line.

Baidu makes most of its money by charging companies for ads that appear in search results and on its other platforms. It operates almost entirely in China, which makes it both dominant in its home market and heavily exposed to Chinese government regulations and the broader Chinese economy. The company has invested heavily in artificial intelligence, and its Ernie Bot — a ChatGPT-style AI assistant — is central to its growth strategy, though competition from other Chinese tech giants like Alibaba and Tencent, plus ongoing regulatory pressure, remain significant risks.

Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-4.5% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-68.4% YoY

YoY Growth Rate

Earnings declining

R&D Spend

¥20.4B/ year

↓ Declining (-8% vs prior year)

15.8% of revenue

In line with sector average (12%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

21.9%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Runway

5+ years

Quarterly Free Cash Flow

↓ Burn rate worsening

¥283.8B cash & investments at current burn rate

Revenue declining

Baidu's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale
Gross Margin
39.0%
Modest — 39.0% gross margin
Profit after running costs
Operating Margin
9.7%
Modest — 9.7% operating margin
Return on the money invested
ROCE
2.3%
Weak — 2.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth
Sales YoY
-4.2%
Shrinking sales (-4.2% YoY)
Profit growth
EPS YoY
-117.4%
Earnings shrinking (-117.4% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash
Cash Conversion
N/A
Data not available
Spare cash per sale
FCF Margin
-7.8%
Burning cash (-7.8%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

What it owes vs what it owns
Debt / Equity
0.40
Conservative — low debt load (0.40)
Covers its interest
Interest Cover
3.48x
Tight — interest eats into profit (3.5x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
N/M
Negative earnings — P/E not meaningful
Cheaper or dearer next year
P/E vs Forward
N/A
not available
Data not available

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Dividends

Not applicable for this business.
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