NASDAQ:PDD is probably undervalued for the fundamentals it is displaying.

Last update: Aug 12, 2024

PDD HOLDINGS INC (NASDAQ:PDD) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NASDAQ:PDD showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

Unpacking NASDAQ:PDD's Valuation Rating

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:PDD has achieved a 8 out of 10:

60.61% of the companies in the same industry are more expensive than PDD, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.72. PDD is valued slightly cheaper when compared to this.
PDD is valuated reasonably with a Price/Forward Earnings ratio of 8.76.
Based on the Price/Forward Earnings ratio, PDD is valued a bit cheaper than 78.79% of the companies in the same industry.
PDD is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.36, which is the current average of the S&P500 Index.
60.61% of the companies in the same industry are more expensive than PDD, based on the Enterprise Value to EBITDA ratio.
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 44.21% in the coming years.

Looking at the 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 better Return On Assets (21.15%) than 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 90.91% 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 11.52%.
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.
With an excellent Operating Margin value of 26.19%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Gross Margin of PDD (61.83%) is better than 84.85% of its industry peers.

Health Analysis for NASDAQ:PDD

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:PDD scores a 9 out of 10:

An Altman-Z score of 7.55 indicates that PDD is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.55, PDD belongs to the top of the industry, outperforming 90.91% 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.
The Debt to FCF ratio of PDD (0.05) is better than 93.94% 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.
PDD has a Debt to Equity ratio of 0.02. This is amongst the best in 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'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.
PDD's Quick ratio of 2.09 is amongst the best of the industry. PDD outperforms 84.85% of its industry peers.

What does the Growth looks like for NASDAQ:PDD

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:PDD boasts 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 30.86% on average over the next years. This is a very strong growth
Based on estimates for the next years, PDD will show a very strong growth in Revenue. The Revenue will grow by 26.32% on average per year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

Keep in mind

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.