Don't overlook NASDAQ:PDD—it's a hidden gem with strong fundamentals and an attractive price tag.

Last update: Nov 27, 2024

Our stock screener has singled out PDD HOLDINGS INC (NASDAQ:PDD) as a stellar value proposition. NASDAQ:PDD not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Understanding NASDAQ:PDD's Valuation Score

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:PDD scores a 9 out of 10:

A Price/Earnings ratio of 9.01 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 78.13% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.61. PDD is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.56, which indicates a rather cheap valuation of PDD.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PDD indicates a rather cheap valuation: PDD is cheaper than 81.25% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.24, PDD is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, PDD is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PDD indicates a rather cheap valuation: PDD is cheaper than 84.38% of the companies listed 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.
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 35.67% in the coming years.

Evaluating Profitability: 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:

Looking at the Return On Assets, with a value of 23.19%, PDD belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
PDD's Return On Equity of 38.87% is amongst the best of the industry. PDD outperforms 96.88% of its industry peers.
PDD's Return On Invested Capital of 31.27% is amongst the best of 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 11.49%.
The 3 year average ROIC (17.97%) for PDD is below the current ROIC(31.27%), indicating increased profibility in the last year.
With an excellent Profit Margin value of 29.10%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Operating Margin value of 28.28%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Gross Margin, with a value of 62.06%, PDD belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.

Health Analysis for NASDAQ:PDD

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:PDD has achieved a 9 out of 10:

An Altman-Z score of 5.74 indicates that PDD is not in any danger for bankruptcy at the moment.
PDD's Altman-Z score of 5.74 is amongst the best of the industry. PDD outperforms 81.25% 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 better Debt to FCF ratio (0.04) than 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 has a better Debt to Equity ratio (0.02) than 78.13% of its industry peers.
A Current Ratio of 2.15 indicates that PDD has no problem at all paying its short term obligations.
PDD has a Current ratio of 2.15. This is in the better half of the industry: PDD outperforms 68.75% of its industry peers.
PDD has a Quick Ratio of 2.15. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
PDD has a Quick ratio of 2.15. This is amongst the best in the industry. PDD outperforms 81.25% of its industry peers.

Assessing Growth Metrics for NASDAQ:PDD

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:PDD, the assigned 8 reflects its growth potential:

PDD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 113.90%, which is quite impressive.
The Revenue has grown by 87.39% 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.
Based on estimates for the next years, PDD will show a very strong growth in Earnings Per Share. The EPS will grow by 30.86% on average per year.
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.

More Decent Value stocks can be found 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.