In the world of growth stocks, NASDAQ:PDD shines as a value proposition.

Last update: Sep 6, 2024

PDD HOLDINGS INC (NASDAQ:PDD) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:PDD is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Understanding NASDAQ:PDD's Growth Score

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.
The Revenue has grown by 106.72% 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 Assessment of 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 9 for valuation:

A Price/Earnings ratio of 9.02 indicates a reasonable valuation of PDD.
75.76% 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 29.93. PDD is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 5.81, the valuation of PDD can be described as very cheap.
PDD's Price/Forward Earnings ratio is rather cheap when compared to the industry. PDD is cheaper than 87.88% of the companies in the same industry.
PDD's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.45.
90.91% of the companies in the same industry are more expensive than PDD, based on the Enterprise Value to EBITDA ratio.
PDD's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PDD is cheaper than 81.82% 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.
The excellent profitability rating of PDD 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.

Evaluating Health: NASDAQ:PDD

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:PDD, the assigned 9 for health provides valuable insights:

PDD has an Altman-Z score of 5.56. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PDD (5.56) is better than 81.82% of its industry peers.
The Debt to FCF ratio of PDD is 0.04, which is an excellent value as it means it would take PDD, only 0.04 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of PDD (0.04) 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 in the better half of the industry: PDD outperforms 78.79% of its industry peers.
A Current Ratio of 2.11 indicates that PDD has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.11, PDD is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
A Quick Ratio of 2.11 indicates that PDD has no problem at all paying its short term obligations.
PDD's Quick ratio of 2.11 is amongst the best of the industry. PDD outperforms 81.82% of its industry peers.

Analyzing Profitability Metrics

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:

PDD has a Return On Assets of 22.84%. This is amongst the best in the industry. PDD outperforms 100.00% of its industry peers.
With an excellent Return On Equity value of 38.91%, PDD belongs to the best of the industry, outperforming 96.97% of the companies in the same industry.
PDD's Return On Invested Capital of 31.76% is amongst the best of the industry. PDD outperforms 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 11.77%.
The last Return On Invested Capital (31.76%) for PDD is above the 3 year average (17.97%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 28.93%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
PDD's Operating Margin of 28.57% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
PDD's Gross Margin of 62.44% 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.

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

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.