In the world of growth stocks, NASDAQ:PDD shines as a value proposition.

Last update: Feb 27, 2024

Discover PDD HOLDINGS INC (NASDAQ:PDD), an undervalued growth gem identified by our stock screener. NASDAQ:PDD is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

How We Gauge Growth for NASDAQ:PDD

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:PDD boasts a 8 out of 10:

The Earnings Per Share has grown by an impressive 49.42% over the past year.
Looking at the last year, PDD shows a very strong growth in Revenue. The Revenue has grown by 68.33%.
The Revenue has been growing by 137.06% on average over the past years. This is a very strong growth!
PDD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.97% yearly.
Based on estimates for the next years, PDD will show a very strong growth in Revenue. The Revenue will grow by 36.34% on average per year.

Understanding NASDAQ:PDD's Valuation Score

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:PDD, the assigned 6 reflects its valuation:

PDD's Price/Earnings ratio is a bit cheaper when compared to the industry. PDD is cheaper than 72.73% of the companies in the same industry.
PDD's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PDD is cheaper than 60.61% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.49, PDD is valued a bit cheaper.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 60.61% of the companies listed in the same industry.
69.70% of the companies in the same industry are more expensive than PDD, based on the Price/Free Cash Flow ratio.
PDD's 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 36.78% in the coming years.

ChartMill's Evaluation of Health

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:PDD scores a 7 out of 10:

An Altman-Z score of 6.58 indicates that PDD is not in any danger for bankruptcy at the moment.
The Altman-Z score of PDD (6.58) is better than 87.88% of its industry peers.
PDD has a debt to FCF ratio of 0.19. This is a very positive value and a sign of high solvency as it would only need 0.19 years to pay back of all of its debts.
PDD's Debt to FCF ratio of 0.19 is amongst the best of the industry. PDD outperforms 93.94% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that PDD is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.01, PDD is in the better half of the industry, outperforming 78.79% of the companies in the same industry.
The Current ratio of PDD (1.83) is better than 60.61% of its industry peers.
With a decent Quick ratio value of 1.83, PDD is doing good in the industry, outperforming 69.70% of the companies in the same industry.

Understanding NASDAQ:PDD's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:PDD, the assigned 7 is a significant indicator of profitability:

With an excellent Return On Assets value of 14.70%, PDD belongs to the best of the industry, outperforming 96.97% of the companies in the same industry.
PDD has a better Return On Equity (28.51%) than 90.91% of its industry peers.
With an excellent Return On Invested Capital value of 22.83%, PDD belongs to the best of the industry, outperforming 96.97% of the companies in the same industry.
The Profit Margin of PDD (23.27%) is better than 96.97% of its industry peers.
PDD has a Operating Margin of 22.87%. This is amongst the best in the industry. PDD outperforms 96.97% of its industry peers.
PDD has a Gross Margin of 66.98%. This is amongst the best in the industry. PDD outperforms 84.85% of its industry peers.
PDD's Gross Margin has improved in the last couple of years.

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.