Snap (NYSE:SNAP) and Baidu (NASDAQ:BIDU) Head to Head Analysis

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

Profitability

This table compares Baidu and Snap’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%
Snap	-4.90%	-14.61%	-4.12%

Analyst Ratings

This is a breakdown of current recommendations for Baidu and Snap, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baidu	3	4	11	0	2.44
Snap	2	23	11	1	2.30

Baidu presently has a consensus target price of $143.14, indicating a potential upside of 74.84%. Snap has a consensus target price of $7.31, indicating a potential upside of 47.01%. Given Baidu’s stronger consensus rating and higher probable upside, research analysts clearly believe Baidu is more favorable than Snap.

Volatility & Risk

Baidu has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Snap has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Insider and Institutional Ownership

47.5% of Snap shares are held by institutional investors. 16.7% of Baidu shares are held by company insiders. Comparatively, 22.7% of Snap shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Baidu and Snap”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baidu	$18.46 billion	1.51	$799.00 million	($2.11)	-38.80
Snap	$5.93 billion	1.42	-$460.49 million	($0.09)	-55.23

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

Summary

Baidu beats Snap on 9 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 Snap

Snap Inc. operates as a technology company in North America, Europe, and internationally. The company offers Snapchat, a visual messaging application with various tabs, such as camera, visual messaging, snap map, stories, and spotlight that enable people to communicate visually through short videos and images. It also provides Spectacles, an eyewear product that connects with Snapchat and captures photos and video from a human perspective; and advertising products, including AR ads and Snap ads comprises a single image or video ads, collection ads, dynamic ads, story ads, and commercials. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.