Contrasting Bilibili (NASDAQ:BILI) and Baidu (NASDAQ:BIDU)

Baidu (NASDAQ:BIDU) and Bilibili (NASDAQ:BILI) are both communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Risk & Volatility

Baidu has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, Bilibili has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Baidu and Bilibili’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baidu	-2.63%	4.30%	2.64%
Bilibili	4.88%	11.42%	4.29%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Baidu and Bilibili, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baidu	3	4	12	0	2.47
Bilibili	0	1	8	0	2.89

Baidu currently has a consensus price target of $144.27, indicating a potential upside of 86.87%. Bilibili has a consensus price target of $29.39, indicating a potential upside of 118.02%. Given Bilibili’s stronger consensus rating and higher possible upside, analysts clearly believe Bilibili is more favorable than Baidu.

Earnings & Valuation

This table compares Baidu and Bilibili”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baidu	$127.31 billion	0.21	$799.00 million	($2.11)	-36.59
Bilibili	$31.42 billion	0.18	$170.67 million	$0.49	27.51

Baidu has higher revenue and earnings than Bilibili. Baidu is trading at a lower price-to-earnings ratio than Bilibili, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

16.1% of Bilibili shares are owned by institutional investors. 16.7% of Baidu shares are owned by insiders. Comparatively, 22.2% of Bilibili shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Bilibili beats Baidu on 10 of the 14 factors compared between the two stocks.

About Baidu

Baidu, Inc. engages in the provision of internet search services in China. It operates through two segments: Baidu Core and iQIYI. The company offers Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services; Baidu Feed that provides users with personalized timeline based on their demographics and interests; Baidu Health that helps users to find the doctor and hospital for healthcare needs; and Haokan, a short video app. It also provides Baidu Knows, an online community where users can ask questions to other users; Baidu Wiki; Baidu Experience; Baidu Post; ERNIE Bot, conversational AI bot; Baidu Wenku; Baidu Maps, a voice-enabled mobile app that provides travel-related services; Baidu Drive; Baijiahao; and DuerOS, a smart assistant platform. In addition, it offers online marketing services, which include pay for performance, an auction-based services that allow customers to bid for priority placement of paid sponsored links and reach users who search for information related to their products or services; other marketing services that include display-based marketing services and other online marketing services based on performance criteria other than cost per click; mobile ecosystem, a portfolio of apps, including Baidu App, Haokan, and Baidu Post; various cloud services and solutions, such as platform as a service, software as a service, and infrastructure as a service; self-driving services, including maps, automated valet parking, navigation pilot, electric vehicles, and robotaxi fleets, as well as Xiaodu smart devices. Further, the company provides iQIYI, an online entertainment service, including original and licensed content; other video content and membership; and online advertising services. It has strategic partnership with Zhejiang Geely Holding Group. The company was formerly known as Baidu.com, Inc. Baidu, Inc. was incorporated in 2000 and is headquartered in Beijing, China.

About Bilibili

Bilibili Inc. provides online entertainment services for the young generations in the People's Republic of China. It offers a range of digital content, including professional user generated videos, mobile games, and value-added services, such as live broadcasting, occupationally generated videos, audio drama on Maoer, and comics on Bilibili Comic. The company also provides advertising services; and IP derivatives and other services. In addition, it engages in the business and technology development activities; e-commerce business; and video, comics, and game distribution activities. Bilibili Inc. was founded in 2009 and is headquartered in Shanghai, the People's Republic of China.