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Baidu shares fall to 52-week lows: Is a rebound on the horizon?  – Baidu (NASDAQ:BIDU)

Baidu shares fall to 52-week lows: Is a rebound on the horizon? – Baidu (NASDAQ:BIDU)

Baidu Inc. BIDU the stock is in free fall.

The Beijing-based company hit a 52-week low of $88.48 on Thursday. It is down 38.12% over the past year and 25.43% year to date.

So what’s the buzz around this Chinese tech giant, and is there a silver lining in the gloom?

Diagram: Benzinga Pro

Technical disturbances: The bear howls

Baidu isn’t just dropping below its key mobile averages; it sinks. Trading below the 5, 20 and 50 day EMAs (exponential moving averages), the outlook is bleak.

Diagram: Benzinga Pro

The stock is also trading below key SMA (Simple Moving Average) levels with price around $88.81 and SMA as follows:

  • 8-day SMA: $91.78
  • 20-day SMA: $95.37
  • 50-day SMA: $100.86
  • 200 day SMA: $110.43

Baidu is also trading below key SMAs. This implies extreme bearish momentum.

Graphics: Benzinga Pro

The MACD (Average Moving Convergence/Divergence) indicator at -3.70 implies ease amid trading sentiment. Bollinger bands have stocks trading in the lower band, reinforcing the ease.

However, the RSI (Relative Strength Index) at 25.67 is in oversold territory. Stocks trading at oversold levels generally generate buy signals and indicate an undervalued state.

Overall, Baidu is practically begging for mercy in the face of relentless sales pressure.

Underrated or just unwanted?

Despite the bloodbath, Baidu’s valuation metrics suggest it could be a hidden gem. With a Non-GAAP P/E (TTM) of 7.74 versus the sector median of 12.23, Baidu appears undervalued by a staggering 36.76%. Forward P/E ratios show similar reductions (Baidu stock 8.16 vs. sector median at 12.31). But is it enough to lure investors back?

Analysts to the rescue?

Enter the analysts with a lifeline. Susquehanna, Benchmark and Morgan Stanley all look bullish on Baidu, with an average price target of $146.67.

That’s a staggering 64.61% upside to today’s prices. Those ratings, down May 24 and May 17, suggest the pros see a major rebound on the horizon.

The big question: risk or reward?

Baidu is at a crossroads. The stock’s technical is a disaster, but the analyst’s valuation and optimism paint a different picture. For those willing to weather the current storm, Baidu stock offers a high-risk, high-reward scenario.

Will Baidu bounce back or is it set for more pain? Investors must decide whether to bet on a comeback baby or a continued slide.

Stay tuned, because Baidu’s next moves could be a game-changer.

Read more: Wall Street looks poised for modestly lower start ahead of key data, tech stocks shut down in premarket: Analyst says ‘bearish sentiment has become understandably quiet’

Image: Shutterstock