Susquehanna Boosts Price Target on Baidu.com (BIDU) to $350

June 26, 2009 9:25 AM EDT

Susquehanna raised its price target on Baidu.com, Inc. (Nasdaq: BIDU) from $260 to $350, reiterating their Positive rating.

The firm said, "We use a square root sign to describe Baidu's growth structure. The angled line on the left part of a square root shape represents consumptions, while the horizontal line on the right stands for the advertiser budget limit. We think Baidu has shifted its major focus to work on improving the ROI of customers through Phoenix Nest System, whereby it can lift the budget line to monetize growing traffics. We think ARPU can easily double and triple from current levels in the next couple of years. That being said, we feel Baidu is facing increasing competition on the consumption side, with emerging rivals such as Tencent, Alibaba.com, and Taobao.com. Combining these factors, we think it is premature to worry about Baidu.com's growth at this point, because the market size is becoming much bigger from current level"

The firm new new non-GAAP EPS for CY10 is $10.

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