Baidu, Inc. (BIDU) continues to soar higher, recently hitting a new all-time high at $718 after reporting awesome Q1 results on April 28 that included a 33% earnings surprise. The long-term view looks good too, with the next-year estimate projecting 51% earnings growth.

Company Description

Baidu, Inc. provides Chinese and Japanese language Internet search services. The company was founded in 2000 and has a market cap of $23 billion.

Baidu have been on fire for most of 2010, almost doubling in price on concern over Google withdrawing from the Chinese Internet search market. More recently, shares jumped higher after the company reported better than expected Q1 results on April 28.

First-Quarter Results

Revenue for the period was up 60% from last year to $190 million. Earnings also came in strong at $2.02, 33% ahead of the Zacks Consensus Estimate. The company now boasts an average earnings surprise of 17% over the last four quarters.

Baidu complimented its awesome revenue growth with very effective costs management initiatives, driving its traffic acquisition cost (TAC), a key Internet search metric, dipped to 13.2% of revenue from 15.3% last year.

Strong Balance Sheet

Baidu is also in the very favorable position of having a pristine balance sheet, with $719 million in cash and no debt.

Estimates on the Move

Estimates have been trending higher for the last few months but recently jumped higher on the good quarter. The current year has added 71 cents in just the last seven days to $11.70. The next-year estimate is up $1.11 in the same time to $17.64, a very bullish 51% growth projection.

Valuation

With some nice gains in the bag, shares of BIDU don’t come cheap, trading with a forward P/E multiple of 55X, a steep premium to the market and its peer group. The company’s P/B multiple also looks a bit rich at 22X, well ahead of its peer group’s 2.43X.

The Chart

Shares of BIDU started jumping higher early in the year on Google’s problems in China before recently gapping open higher on the earnings surprise. Take a look below.

BIDU: Baidu, Inc. > <P ALIGN=

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research