Looking for growth without the hefty price tag? Consider NASDAQ:PDD.

Last update: Mar 19, 2024

PDD HOLDINGS INC (NASDAQ:PDD) was identified as an affordable growth stock by our stock screener. NASDAQ:PDD is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

How We Gauge Growth for NASDAQ:PDD

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:PDD, the assigned 8 reflects its growth potential:

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

Understanding NASDAQ:PDD's Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:PDD has earned a 6 for valuation:

Based on the Price/Earnings ratio, PDD is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
PDD's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PDD is cheaper than 66.67% of the companies in the same industry.
PDD is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.14, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, PDD is valued a bit cheaper than 63.64% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PDD is valued a bit cheaper than 75.76% 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 37.22% in the coming years.

Deciphering NASDAQ:PDD's Health Rating

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, 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 6.66. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.66, PDD belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
The Debt to FCF ratio of PDD is 0.19, which is an excellent value as it means it would take PDD, only 0.19 years of fcf income to pay off all of its debts.
PDD has a Debt to FCF ratio of 0.19. This is amongst the best in the industry. PDD outperforms 93.94% of its industry peers.
PDD has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
PDD's Debt to Equity ratio of 0.01 is fine compared to the rest of the industry. PDD outperforms 78.79% of its industry peers.
PDD's Current ratio of 1.83 is fine compared to the rest of the industry. PDD outperforms 60.61% of its industry peers.
PDD's Quick ratio of 1.83 is fine compared to the rest of the industry. PDD outperforms 69.70% of its industry peers.

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:

Looking at the Return On Assets, with a value of 14.70%, PDD belongs to the top of the industry, outperforming 96.97% of the companies in the same industry.
The Return On Equity of PDD (28.51%) is better than 87.88% of its industry peers.
PDD has a Return On Invested Capital of 22.83%. This is amongst the best in the industry. PDD outperforms 96.97% of its industry peers.
PDD has a better Profit Margin (23.27%) 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.
Looking at the Gross Margin, with a value of 66.98%, PDD belongs to the top of the industry, outperforming 84.85% of the companies in the same industry.
In the last couple of years the Gross Margin of PDD has grown nicely.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Check the latest full fundamental report of PDD for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.