NASDAQ:PDD, a growth stock which is not overvalued.

Last update: Jun 12, 2024

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.

Assessing Growth Metrics for NASDAQ:PDD

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:PDD has achieved a 8 out of 10:

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.
The Earnings Per Share is expected to grow by 31.67% on average over the next years. This is a very strong growth
PDD is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 22.61% 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 6 out of 10:

65.63% of the companies in the same industry are more expensive than PDD, based on the Price/Earnings ratio.
PDD's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.24.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 65.63% of the companies listed in the same industry.
PDD is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 19.93, which is the current average of the S&P500 Index.
Based on the Price/Free Cash Flow ratio, PDD is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of PDD may justify a higher PE ratio.
PDD's earnings are expected to grow with 31.67% in the coming years. This may justify a more expensive valuation.

Understanding NASDAQ:PDD's Health Score

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 9 out of 10:

An Altman-Z score of 7.95 indicates that PDD is not in any danger for bankruptcy at the moment.
PDD has a better Altman-Z score (7.95) than 90.63% of its industry peers.
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.
The Debt to FCF ratio of PDD (0.05) is better than 93.75% of its industry peers.
PDD has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of PDD (0.02) is better than 81.25% of its industry peers.
PDD has a Current Ratio of 2.09. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.09, PDD is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
A Quick Ratio of 2.09 indicates that PDD has no problem at all paying its short term obligations.
PDD's Quick ratio of 2.09 is amongst the best of the industry. PDD outperforms 84.38% of its industry peers.

Profitability Examination for NASDAQ:PDD

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:PDD has earned a 8 out of 10:

PDD has a better Return On Assets (21.15%) than 100.00% of its industry peers.
The Return On Equity of PDD (36.54%) is better than 93.75% of its industry peers.
PDD has a better Return On Invested Capital (29.27%) than 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PDD is significantly above the industry average of 11.29%.
The 3 year average ROIC (17.97%) for PDD is below the current ROIC(29.27%), indicating increased profibility in the last year.
PDD has a better Profit Margin (26.93%) than 100.00% of its industry peers.
The Operating Margin of PDD (26.19%) is better than 100.00% of its industry peers.
PDD has a better Gross Margin (61.83%) than 84.38% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

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.