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

Last update: Jul 25, 2024

Consider PDD HOLDINGS INC (NASDAQ:PDD) as an affordable growth stock, identified by our stock screening tool. NASDAQ:PDD is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

Understanding NASDAQ:PDD's Growth Score

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:

The Earnings Per Share has grown by an impressive 91.34% over the past year.
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 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.

Valuation Analysis for NASDAQ:PDD

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 8 for valuation:

Compared to the rest of the industry, the Price/Earnings ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 60.61% of the companies listed in the same industry.
PDD is valuated rather cheaply when we compare the Price/Earnings ratio to 24.43, which is the current average of the S&P500 Index.
PDD is valuated reasonably with a Price/Forward Earnings ratio of 8.38.
Based on the Price/Forward Earnings ratio, PDD is valued a bit cheaper than the industry average as 78.79% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.38. PDD is valued rather cheaply when compared to this.
PDD's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PDD is cheaper than 60.61% 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.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PDD has an outstanding 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 44.53% 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 9 out of 10:

An Altman-Z score of 7.40 indicates that PDD is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 7.40, PDD belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
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.
PDD has a Debt to FCF ratio of 0.05. This is amongst the best in the industry. PDD outperforms 93.94% of its industry peers.
A Debt/Equity ratio of 0.02 indicates that PDD is not too dependend on debt financing.
The Debt to Equity ratio of PDD (0.02) is better than 81.82% 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.
PDD's Current ratio of 2.09 is fine compared to the rest of the industry. PDD outperforms 75.76% of its industry peers.
A Quick Ratio of 2.09 indicates that PDD has no problem at all paying its short term obligations.
The Quick ratio of PDD (2.09) is better than 84.85% of its industry peers.

Profitability Examination for NASDAQ:PDD

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.
Looking at the Return On Equity, with a value of 36.54%, PDD belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
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 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 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's Gross Margin of 61.83% is amongst the best of the industry. PDD outperforms 84.85% of its industry peers.

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

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

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.