NASDAQ:PDD, an undervalued stock with good fundamentals.

Last update: Jul 22, 2024

Discover PDD HOLDINGS INC (NASDAQ:PDD), an undervalued stock highlighted by our stock screener. NASDAQ:PDD showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

How We Gauge Valuation for NASDAQ:PDD

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:PDD was assigned a score of 8 for valuation:

63.64% 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 28.69.
PDD is valuated reasonably with a Price/Forward Earnings ratio of 8.45.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 78.79% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.54, PDD is valued rather cheaply.
PDD's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PDD is 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 69.70% of the companies in the same industry.
PDD's 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 44.53% in the coming years. This may justify a more expensive valuation.

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 8 out of 10:

PDD's Return On Assets of 21.15% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
PDD has a Return On Equity of 36.54%. This is amongst the best in the industry. PDD outperforms 93.94% 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.
The Average Return On Invested Capital over the past 3 years for PDD is significantly above the industry average of 11.29%.
The last Return On Invested Capital (29.27%) for PDD is above the 3 year average (17.97%), which is a sign of increasing profitability.
PDD's Profit Margin of 26.93% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
PDD has a better Operating Margin (26.19%) than 100.00% of its industry peers.
PDD has a better Gross Margin (61.83%) than 84.85% of its industry peers.

Health Analysis for NASDAQ:PDD

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:PDD, the assigned 9 reflects its health status:

An Altman-Z score of 7.44 indicates that PDD is not in any danger for bankruptcy at the moment.
The Altman-Z score of PDD (7.44) is better than 90.91% of its industry peers.
The Debt to FCF ratio of PDD is 0.05, which is an excellent value as it means it would take PDD, only 0.05 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of PDD (0.05) is better than 93.94% of its industry peers.
A Debt/Equity ratio of 0.02 indicates that PDD is not too dependend on debt financing.
PDD's Debt to Equity ratio of 0.02 is amongst the best of the industry. PDD outperforms 81.82% of its industry peers.
A Current Ratio of 2.09 indicates that PDD has no problem at all paying its short term obligations.
PDD has a Current ratio of 2.09. This is in the better half of the industry: PDD outperforms 75.76% 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.
PDD has a Quick ratio of 2.09. This is amongst the best in the industry. PDD outperforms 84.85% of its industry peers.

Assessing Growth for NASDAQ:PDD

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:PDD has earned a 8 for growth:

The Earnings Per Share has grown by an impressive 91.34% over the past year.
PDD shows a strong growth in Revenue. In the last year, the Revenue has grown by 105.55%.
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 30.86% 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 26.32% yearly.

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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.