Investors seeking growth at a reasonable cost should explore NASDAQ:PDD.

Last update: Oct 16, 2023

PDD HOLDINGS INC (NASDAQ:PDD) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:PDD is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

ChartMill's Evaluation of Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:PDD scores a 7 out of 10:

PDD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 85.18%, which is quite impressive.
The Revenue has grown by 58.93% in the past year. This is a very strong growth!
The Revenue has been growing by 137.06% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 9.48% on average over the next years. This is quite good.
PDD is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.68% yearly.

Valuation Insights: NASDAQ:PDD

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:PDD boasts a 5 out of 10:

76.47% of the companies in the same industry are more expensive than PDD, based on the Price/Earnings ratio.
PDD's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PDD is cheaper than 67.65% of the companies in the same industry.
PDD's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PDD is cheaper than 70.59% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PDD is valued a bit cheaper than 64.71% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PDD has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as PDD's earnings are expected to grow with 26.15% in the coming years.

Understanding NASDAQ:PDD's Health Score

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:PDD was assigned a score of 7 for health:

An Altman-Z score of 6.56 indicates that PDD is not in any danger for bankruptcy at the moment.
PDD has a Altman-Z score of 6.56. This is amongst the best in the industry. PDD outperforms 91.18% of its industry peers.
The Debt to FCF ratio of PDD is 0.26, which is an excellent value as it means it would take PDD, only 0.26 years of fcf income to pay off all of its debts.
PDD has a Debt to FCF ratio of 0.26. This is amongst the best in the industry. PDD outperforms 91.18% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that PDD is not too dependend on debt financing.
PDD's Debt to Equity ratio of 0.01 is fine compared to the rest of the industry. PDD outperforms 76.47% of its industry peers.
PDD's Current ratio of 1.91 is fine compared to the rest of the industry. PDD outperforms 61.76% of its industry peers.
PDD has a better Quick ratio (1.91) than 73.53% of its industry peers.

Profitability Examination for NASDAQ:PDD

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:PDD, the assigned 7 is noteworthy for profitability:

With an excellent Return On Assets value of 15.04%, PDD belongs to the best of the industry, outperforming 97.06% of the companies in the same industry.
PDD has a better Return On Equity (28.38%) than 94.12% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.08%, PDD belongs to the top of the industry, outperforming 97.06% of the companies in the same industry.
PDD has a Profit Margin of 24.96%. This is amongst the best in the industry. PDD outperforms 100.00% of its industry peers.
The Operating Margin of PDD (23.72%) is better than 97.06% of its industry peers.
PDD has a Gross Margin of 72.07%. This is amongst the best in the industry. PDD outperforms 91.18% of its industry peers.
In the last couple of years the Gross Margin of PDD has grown nicely.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of PDD

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.