NASDAQ:PDD is not too expensive for the growth it is showing.

Last update: Nov 7, 2023

Here's PDD HOLDINGS INC (NASDAQ:PDD) for you, a growth stock our stock screener believes is undervalued. NASDAQ:PDD is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Understanding NASDAQ:PDD's Growth

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:PDD has received a 8 out of 10:

The Earnings Per Share has grown by an impressive 85.18% over the past year.
The Revenue has grown by 58.93% in the past year. This is a very strong growth!
PDD shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 137.06% yearly.
Based on estimates for the next years, PDD will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.06% on average per year.
Based on estimates for the next years, PDD will show a very strong growth in Revenue. The Revenue will grow by 20.30% on average per year.

Assessing Valuation Metrics for NASDAQ:PDD

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:PDD has received a 5 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 76.47% of the companies listed in the same industry.
Based on the Price/Forward Earnings ratio, PDD is valued a bit cheaper than 70.59% of the companies in the same industry.
70.59% of the companies in the same industry are more expensive than PDD, based on the Enterprise Value to EBITDA ratio.
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.
The decent profitability rating of PDD may justify a higher PE ratio.
A more expensive valuation may be justified as PDD's earnings are expected to grow with 26.40% in the coming years.

Deciphering NASDAQ:PDD's Health Rating

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:PDD has earned a 7 out of 10:

PDD has an Altman-Z score of 6.57. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PDD (6.57) is better than 88.24% 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's Debt to FCF ratio of 0.26 is amongst the best of 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 has a better Debt to Equity ratio (0.01) than 76.47% of its industry peers.
PDD has a better Quick ratio (1.91) than 70.59% of its industry peers.

Exploring NASDAQ:PDD's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:PDD scores a 7 out of 10:

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.
PDD's Return On Invested Capital of 22.08% is amongst the best of the industry. PDD outperforms 94.12% of its industry peers.
With an excellent Profit Margin value of 24.96%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
PDD's Operating Margin of 23.72% is amongst the best of the industry. PDD outperforms 97.06% of its industry peers.
With an excellent Gross Margin value of 72.07%, PDD belongs to the best of the industry, outperforming 91.18% of the companies in the same industry.
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.