NASDAQ:PDD, a strong growth stock, setting up for a breakout.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether PDD HOLDINGS INC (NASDAQ:PDD) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but PDD HOLDINGS INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

A Closer Look at Growth for NASDAQ:PDD

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:PDD was assigned a score of 8 for growth:

• PDD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 91.34%, which is quite impressive.
• The Revenue has grown by 105.55% in the past year. This is a very strong growth!
• Measured over the past years, PDD shows a very strong growth in Revenue. The Revenue has been growing by 79.96% on average per year.
• Based on estimates for the next years, PDD will show a very strong growth in Earnings Per Share. The EPS will grow by 31.67% 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 22.61% on average per year.

Health Assessment of NASDAQ:PDD

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 9 out of 10:

• PDD has an Altman-Z score of 7.95. 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 7.95, PDD belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
• PDD has a debt to FCF ratio of 0.05. This is a very positive value and a sign of high solvency as it would only need 0.05 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.05, PDD belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
• A Debt/Equity ratio of 0.02 indicates that PDD is not too dependend on debt financing.
• Looking at the Debt to Equity ratio, with a value of 0.02, PDD belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
• A Current Ratio of 2.09 indicates that PDD has no problem at all paying its short term obligations.
• PDD has a better Current ratio (2.09) than 75.00% of its industry peers.
• PDD has a Quick Ratio of 2.09. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
• With an excellent Quick ratio value of 2.09, PDD belongs to the best of the industry, outperforming 84.38% 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 8 is a significant indicator of profitability:

• PDD has a Return On Assets of 21.15%. This is amongst the best in the industry. PDD outperforms 100.00% of its industry peers.
• PDD's Return On Equity of 36.54% is amongst the best of the industry. PDD outperforms 93.75% of its industry peers.
• With an excellent Return On Invested Capital value of 29.27%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
• Measured over the past 3 years, the Average Return On Invested Capital for PDD is significantly above the industry average of 11.27%.
• The 3 year average ROIC (17.97%) for PDD is below the current ROIC(29.27%), indicating increased profibility in the last year.
• With an excellent Profit Margin value of 26.93%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
• The Operating Margin of PDD (26.19%) is better than 100.00% of its industry peers.
• The Gross Margin of PDD (61.83%) is better than 84.38% of its industry peers.

Why is NASDAQ:PDD a setup?

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for NASDAQ:PDD is 8:

Besides having an excellent technical rating, PDD also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 146.91, a Stop Loss order could be placed below this zone.

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

Our latest full fundamental report of PDD contains the most current fundamental analsysis.

Our latest full technical report of PDD contains the most current technical analsysis.

Keep in mind

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.