Why NASDAQ:PDD Is a Promising High-Growth Stock in the Midst of Consolidation.

Last update: Nov 6, 2024

Exploring Growth Potential: PDD HOLDINGS INC (NASDAQ:PDD) and Its Base Formation. Growth investors seek promising revenue and EPS growth, and PDD HOLDINGS INC has come under our scrutiny for potential growth investing. While it's crucial to do your own research, we've detected PDD HOLDINGS INC on our screen for growth with base formation, suggesting it merits a closer look.

Exploring NASDAQ:PDD's Growth

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 112.20%, which is quite impressive.
Looking at the last year, PDD shows a very strong growth in Revenue. The Revenue has grown by 106.72%.
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.
PDD is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 30.86% yearly.
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.

Unpacking NASDAQ:PDD's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:PDD has received a 9 out of 10:

An Altman-Z score of 6.54 indicates that PDD is not in any danger for bankruptcy at the moment.
The Altman-Z score of PDD (6.54) is better than 84.38% 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.
PDD has a Debt to FCF ratio of 0.04. This is amongst the best in the industry. PDD outperforms 93.75% 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's Debt to Equity ratio of 0.02 is fine compared to the rest of the industry. PDD outperforms 78.13% of its industry peers.
A Current Ratio of 2.11 indicates that PDD has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.11, PDD is doing good in the industry, outperforming 68.75% 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 has a better Quick ratio (2.11) than 81.25% of its industry peers.

Evaluating Profitability: NASDAQ:PDD

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:PDD has achieved a 8:

PDD has a better Return On Assets (22.84%) than 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 100.00% of the companies in the same industry.
PDD has a Return On Invested Capital of 31.76%. This is amongst the best in the industry. PDD outperforms 100.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PDD is significantly above the industry average of 11.65%.
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.
PDD has a Profit Margin of 28.93%. This is amongst the best in the industry. PDD outperforms 100.00% of its industry peers.
Looking at the Operating Margin, with a value of 28.57%, PDD belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Gross Margin of PDD (62.44%) is better than 84.38% of its industry peers.

Looking at the Setup

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:PDD currently has a 7 as setup rating:

PDD has a bad technical rating, but it does show a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 125.72. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 120.56, a Stop Loss order could be placed below this zone.

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

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

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

Keep in mind

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.