Baidu‘s current market price is almost 40% lower than our price estimate of $216. While the stock continues to show a declining trend, we believe that the market has already factored all the potential threats to Baidu’s revenues due to increasing competition. A further significant decline in the stock price looks unlikely. Our previous analysis listed out reasons why Baidu could lose its strong market share. While this analysis did not factor in the impact of the expected launch of Google Play in the fall, we believe this decision could add to Baidu’s woes and may lead to additional potential downside of 10% to our price estimate. Our updated bear case of potential 45% downside still results in a price estimate which is within 5% range of the market price, suggesting that further stock price decline might be unlikely.

from Forbes – Tech http://ift.tt/1LWPrqA
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