Baidu.com, Inc. (ADR) (BIDU), Google Inc (GOOG): This Search Engine Looks Very Attractive

Even though the company’s recent results did not meet the market’s expectations, Baidu now trades for a cheap multiple given its strong growth. Baidu trades for 17 times its trailing earnings, about on par with the S&P 500 Index, appreciably below Google Inc (NASDAQ:GOOG)’s 25 P/E.

The market was understandably concerned by the fact that Baidu’s top-line growth could not flow through to the bottom line. Indeed, Baidu has spent heavily on marketing and research and development in recent quarters. However, the company’s growth plans are ambitious and management takes pride in this. In the earnings report, Baidu pointed investors to the fact that its flagship mobile search product has now surpassed 100 million daily active users, an over 25% increase from the end of the fourth quarter.

Going forward, the company expects current quarter revenue to increase an additional 35% from last year’s second quarter. Assuming costs moderate for Baidu.com, Inc. (ADR) (NASDAQ:BIDU), and after such a prolonged downturn, investors may have no better opportunity to pick up shares on the cheap than exists right now.

Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends Baidu and Google. The Motley Fool owns shares of Baidu and Google.

The article This Search Engine Looks Very Attractive originally appeared on Fool.com.

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