NASDAQ:PDD, an undervalued stock with good fundamentals.

Last update: Sep 3, 2024

Consider PDD HOLDINGS INC (NASDAQ:PDD) as a top value stock, identified by our stock screening tool. NASDAQ:PDD shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Evaluating Valuation: 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 9 out of 10:

A Price/Earnings ratio of 9.38 indicates a reasonable valuation of PDD.
Compared to the rest of the industry, the Price/Earnings ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 75.76% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 30.73. PDD is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 6.04, the valuation of PDD can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PDD indicates a rather cheap valuation: PDD is cheaper than 84.85% of the companies listed in the same industry.
PDD is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.86, which is the current average of the S&P500 Index.
84.85% 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 cheaper than 81.82% 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.
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 44.25% in the coming years.

A Closer Look at Profitability for NASDAQ:PDD

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:PDD, the assigned 8 is noteworthy for profitability:

With an excellent Return On Assets value of 22.84%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
PDD's Return On Equity of 38.91% is amongst the best of the industry. PDD outperforms 96.97% of its industry peers.
Looking at the Return On Invested Capital, with a value of 31.76%, PDD belongs to the top 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 11.78%.
The 3 year average ROIC (17.97%) for PDD is below the current ROIC(31.76%), indicating increased profibility in the last year.
The Profit Margin of PDD (28.93%) is better than 100.00% of its industry peers.
PDD has a better Operating Margin (28.57%) than 100.00% of its industry peers.
PDD has a better Gross Margin (62.44%) than 84.85% of its industry peers.

Health Insights: NASDAQ:PDD

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:

PDD has an Altman-Z score of 5.68. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
PDD's Altman-Z score of 5.68 is amongst the best of the industry. PDD outperforms 81.82% of its industry peers.
PDD has a debt to FCF ratio of 0.04. This is a very positive value and a sign of high solvency as it would only need 0.04 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.04, PDD belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
PDD has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.02, PDD is doing good in the industry, outperforming 78.79% of the companies in the same industry.
A Current Ratio of 2.11 indicates that PDD has no problem at all paying its short term obligations.
PDD has a Current ratio of 2.11. This is in the better half of the industry: PDD outperforms 72.73% of its industry peers.
A Quick Ratio of 2.11 indicates that PDD has no problem at all paying its short term obligations.
The Quick ratio of PDD (2.11) is better than 81.82% of its industry peers.

Growth Insights: 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:

PDD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 112.20%, which is quite impressive.
PDD shows a strong growth in Revenue. In the last year, the Revenue has grown by 106.72%.
The Revenue has been growing by 79.96% on average over the past years. This is a very strong growth!
PDD is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 30.86% yearly.
PDD is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 26.32% yearly.

More Decent Value stocks can be found in our Decent Value screener.

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

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.