Core Viewpoint - PDD Holdings Inc. Sponsored ADR is expected to show significant year-over-year growth in earnings and revenue in its upcoming earnings report, despite recent stock performance lagging behind major indices [1][2]. Company Performance - The stock price of PDD Holdings Inc. reached $138.07, with a slight increase of +0.25% compared to the previous day, underperforming the S&P 500 which gained 1.02% [1]. - Over the past month, shares have depreciated by 6.27%, which is slightly better than the Conglomerates sector's loss of 6.3% but worse than the S&P 500's gain of 4.44% [1]. - Analysts expect earnings of $2.89 per share for the upcoming report, indicating a year-over-year growth of 100.69%, and revenue is projected to be $13.72 billion, reflecting a 90.3% increase compared to the same quarter last year [1]. Analyst Estimates - For the full year, earnings are projected at $12.32 per share and revenue at $56.27 billion, showing increases of +87.8% and +62.43% respectively from the previous year [2]. - Recent changes to analyst estimates are seen as indicative of the company's business outlook, with positive revisions suggesting a favorable trend [2]. Zacks Rank and Valuation - PDD Holdings Inc. currently holds a Zacks Rank of 1 (Strong Buy), with a historical average annual return of +25% for 1 ranked stocks since 1988 [3]. - The Forward P/E ratio for PDD is 11.18, which is below the industry average of 18.29, indicating a potential valuation discount [3]. - The PEG ratio for PDD is 0.22, significantly lower than the industry average PEG ratio of 1.67, suggesting that the stock may be undervalued relative to its expected earnings growth [3]. Industry Context - The Diversified Operations industry, part of the Conglomerates sector, holds a Zacks Industry Rank of 63, placing it in the top 25% of over 250 industries [4]. - The Zacks Industry Rank indicates that the top-rated industries tend to outperform the lower-rated ones by a factor of 2 to 1 [4].

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about PDD Holdings Inc. Sponsored ADR (PDD) .PDD Holdings Inc. Sponsored ADR cur ...

Loading...Loading...In the fierce battlefield of e-Commerce, Amazon.com Inc AMZN continues to reign supreme, but emerging challengers like PDD Holdings Inc‘s PDD Temu, Shein, and TikTok Shop are making significant strides.Wedbush Securities analyst Scott Devitt’s latest survey of over 1,000 U.S. consumers reveals intriguing shifts in spending habits and consumer satisfaction that investors need to watch closely.Amazon’s Dominance Remains UnshakenAmazon remains the e-Commerce kingpin, with 64% of surveyed co ...

Core Viewpoint - PDD Holdings Inc., formerly known as Pinduoduo Inc., is under investigation following a lawsuit by the Arkansas Attorney General regarding its Temu online marketplace, which is accused of violating personal information protection laws [2]. Investigation Details - The lawsuit claims that Temu operates as "functionally malware and spyware," designed to gain unrestricted access to users' phone operating systems for unauthorized data collection [2]. - Following the announcement of the lawsuit, PDD's American depositary receipt (ADR) price dropped by $8.06, or 5.77%, closing at $131.94 per ADR on June 27, 2024 [2]. Next Steps - Investors who purchased PDD securities and have relevant information are encouraged to assist the investigation by visiting the law firm's website [3].

PDD Holdings Inc. NASDAQ: PDD is a Chinese e-commerce company that mainly operates two popular online businesses. The core business is the social commerce company Pinduoduo. Temu is their second business, an online store known for selling heavily discounted products sourced directly from manufacturers and factories in China. The combination of the two businesses has generated hypergrowth revenue streams that seem too good to be true at times.PDD TodayPDDPDD$136.16 +1.48 (+1.10%) 52-Week Range$69.06▼$164.69P ...

Core Insights - Amazon is initiating collaboration with Chinese sellers to ship products directly from China to U.S. customers, aiming to enhance its competitive stance against Chinese e-commerce rivals like Shein and Temu [1][2] - The move comes as Shein faces challenges in its attempts to go public in the U.S., potentially shifting its focus to the London Stock Exchange [1][5] Group 1: Amazon's Strategy - Amazon is reportedly developing a dedicated section on its website for low-cost clothing and everyday items sourced directly from Chinese suppliers, with delivery times estimated at nine to eleven days [3] - The company has been exploring new ways to partner with sellers to provide customers with more selection, lower prices, and greater convenience [2] Group 2: Competitive Landscape - Shein and Temu have experienced significant growth in the U.S. market, with Temu's parent company PDD consistently doubling its revenue and profits year-over-year [4] - Amazon's strategy to regionalize its warehouse network has proven effective, with approximately 4 billion packages delivered within one day in 2023 [4] Group 3: Regulatory Considerations - The U.S. government's response to Amazon's direct shipping of China-made products remains uncertain, especially in light of scrutiny faced by Shein and Temu regarding allegations of forced labor [5] - Shein's efforts to secure a public listing in the U.S. have encountered multiple obstacles, prompting the company to consider a listing on the London Stock Exchange instead [5]

Core Viewpoint - PDD Holdings Inc. has experienced a significant decline in stock price, dropping 13.2% over the past four weeks, but is now positioned for a potential trend reversal due to being in oversold territory and positive earnings outlook from analysts [1]. Group 1: Stock Performance and Indicators - The stock is currently in oversold territory with an RSI reading of 28.84, indicating that the heavy selling pressure may be exhausting itself [2][3]. - A stock is generally considered oversold when its RSI falls below 30, suggesting a potential price reversal [2]. Group 2: Earnings Estimates and Analyst Consensus - There has been a strong consensus among sell-side analysts to raise earnings estimates for PDD, with a 2% increase in the consensus EPS estimate over the last 30 days [3]. - An upward trend in earnings estimate revisions typically correlates with price appreciation in the near term [3]. - PDD holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate trends and EPS surprises, indicating strong potential for a turnaround [3].

Core Viewpoint - The average brokerage recommendation (ABR) for PDD Holdings Inc. Sponsored ADR is 1.04, indicating a strong buy sentiment from analysts [1][6]. Brokerage Recommendation Trends - The ABR is based on recommendations from 14 brokerage firms, with 13 ratings as Strong Buy and 1 as Buy, translating to 92.9% and 7.1% of total recommendations respectively [1]. - Despite the strong buy recommendations, studies suggest limited success of brokerage recommendations in predicting stock price increases [2][3]. Zacks Rank vs. ABR - The Zacks Rank, which is based on earnings estimate revisions, is a more reliable indicator of near-term stock price performance compared to ABR [3][5]. - Zacks Rank is displayed in whole numbers (1 to 5) and is updated more frequently than ABR, which may not reflect the most current information [4][5]. Earnings Estimate Revisions - The Zacks Consensus Estimate for PDD has increased by 42.6% over the past month to $12.18, indicating growing optimism among analysts regarding the company's earnings prospects [6]. - The significant change in consensus estimates has contributed to PDD receiving a Zacks Rank 1 (Strong Buy) [6].

Investment Rating - 6-month rating: Buy (maintained) [3] Core Views - TEMU's rapid expansion across 70 countries and its "major holiday marketing + social fission" strategy are driving user growth, potentially leading to better-than-expected GMV and revenue growth for the year [1] - The introduction of the semi-hosted model on March 15th, which shifts overseas warehousing, freight, and return responsibilities to merchants, is expected to improve the overseas UE model and enrich the supply of large SKUs, potentially narrowing overseas losses [1] - PDD's 24Q1 revenue grew 130.7% YoY to RMB 868 billion, exceeding Bloomberg consensus by 13%, with marketing service revenue up 55.8% to RMB 425 billion and transaction service revenue up 326.8% to RMB 444 billion, driven by TEMU's rapid development [3] - Non-GAAP adjusted net profit for 24Q1 surged 202.2% YoY to RMB 306.02 billion, exceeding Bloomberg consensus by 97%, with a Non-GAAP net margin of 35.3%, attributed to effective cost control and operational efficiency improvements [3] - PDD's focus on high-quality development, including enhancing consumer experience, optimizing supply chain efficiency, and improving platform governance, is expected to drive market share gains and increase per capita GMV [4] - The company's fee rates have significantly declined, with sales expense ratio down 16.2 ppts YoY to 27%, R&D expense ratio down 3.3 ppts to 3.4%, and management expense ratio down 0.1 ppts to 2.1%, indicating improved operating leverage [11] - Revenue forecasts for 2024-2025 have been raised to RMB 4253 billion and RMB 5656 billion, representing YoY growth of 71.7% and 33%, respectively, with Non-GAAP net profit expected to reach RMB 1403 billion and RMB 1867 billion, reflecting YoY growth of 106.7% and 33% [15] Key Highlights by Section TEMU Expansion and Growth - TEMU has expanded to 70 countries, with growth exceeding expectations in multiple regions, potentially driving full-year GMV and revenue growth [1] - The semi-hosted model is expected to improve overseas profitability and expand large SKU offerings [1] 24Q1 Performance - 24Q1 revenue and profit growth significantly exceeded market expectations, with strong contributions from TEMU's overseas business [3] - Non-GAAP net profit surged 202.2% YoY, driven by cost control and operational efficiency [3] High-Quality Development Strategy - PDD's focus on high-quality consumption, supply, and ecosystem development is expected to drive market share gains and increase per capita GMV [4] - The company is enhancing its supply chain and platform governance, supporting long-term growth [4] Cost Efficiency - Significant reductions in sales, R&D, and management expense ratios indicate improved operating leverage and cost efficiency [11] Financial Forecasts - Revenue and Non-GAAP net profit forecasts for 2024-2025 have been raised, reflecting strong growth expectations [15]

Robert Way Article Thesis PDD Holdings Inc. (NASDAQ:PDD) is showcasing explosive business growth at a rate of more than 100% annualized, thanks, in part, to its blockbuster Temu shopping app. And yet, PDD Holdings trades at a very undemanding valuation of just 12x this year's expected net profits. Investors should not forget about the risks of investing in PDD Holdings, but the combination of very strong business growth and a very inexpensive valuation could be of interest to investors. PDD Holdings: An Und ...