Head-To-Head Comparison: AppLovin (NASDAQ:APP) & Baidu (NASDAQ:BIDU)

AppLovin (NASDAQ:APP) and Baidu (NASDAQ:BIDU) are both large-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Risk and Volatility

AppLovin has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500. Comparatively, Baidu has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppLovin	$2.63 billion	9.24	$356.71 million	$1.00	71.19
Baidu	$18.96 billion	1.82	$2.86 billion	$7.72	12.72

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AppLovin	10.84%	24.69%	6.54%
Baidu	15.09%	9.41%	5.72%

Institutional and Insider Ownership

41.9% of AppLovin shares are held by institutional investors. 12.4% of AppLovin shares are held by insiders. Comparatively, 16.7% of Baidu shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for AppLovin and Baidu, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppLovin	1	4	12	0	2.65
Baidu	0	0	14	0	3.00

AppLovin currently has a consensus target price of $59.31, suggesting a potential downside of 16.69%. Baidu has a consensus target price of $173.29, suggesting a potential upside of 76.41%. Given Baidu’s stronger consensus rating and higher probable upside, analysts plainly believe Baidu is more favorable than AppLovin.

Summary

Baidu beats AppLovin on 8 of the 14 factors compared between the two stocks.

About AppLovin

AppLovin Corporation engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content in the United States and internationally. It operates through two segments, Software Platform and Apps. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; MAX, an in-app bidding software that optimizes the value of a publisher's advertising inventory by running a real-time competitive auction; Adjust, a measurement and analytics marketing platform that provides marketers with the visibility, insights, and tools needed to grow their apps from early stage to maturity; and Wurl, a connected TV platform, which distributes streaming video for content companies and provides advertising and publishing solutions through its AdPool, ContentDiscovery, and Global FAST Pass products. It also offers SparkLabs, which uses app store optimization to enhance ad visibility; AppLovin Exchange, which connects buyers to mobile and CTV devices through a single and direct RTB exchange; and Array, an end-to-end app management suite for mobile operators and end users. In addition, the company operates various free-to-play mobile games. It serves individuals, small and independent businesses, enterprises, advertisers and advertising networks, mobile app publishers, indie studio developers, and internet platforms. AppLovin Corporation was incorporated in 2011 and is headquartered in Palo Alto, California.

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.