For those who appreciate growth without the sticker shock, NASDAQ:PDD is worth considering.

Last update: Dec 2, 2024

Uncover the potential of PDD HOLDINGS INC (NASDAQ:PDD), a growth stock that our stock screener found to be reasonably priced. NASDAQ:PDD is excelling in growth aspects, maintaining a healthy financial position, and still offers an attractive valuation. We'll examine each aspect in detail.

Deciphering NASDAQ:PDD's Growth Rating

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:PDD was assigned a score of 8 for growth:

The Earnings Per Share has grown by an impressive 113.90% over the past year.
The Revenue has grown by 87.39% in the past year. This is a very strong growth!
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.
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.

Assessing Valuation Metrics for NASDAQ:PDD

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:PDD has received a 10 out of 10:

A Price/Earnings ratio of 8.75 indicates a reasonable valuation of PDD.
Based on the Price/Earnings ratio, PDD is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
PDD's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.78.
With a Price/Forward Earnings ratio of 7.35, the valuation of PDD can be described as very cheap.
84.38% of the companies in the same industry are more expensive than PDD, based on the Price/Forward Earnings ratio.
PDD's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.23.
90.63% 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 87.50% 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 35.67% in the coming years.

Health Analysis for 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 5.65. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PDD (5.65) is better than 81.25% 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.
With an excellent Debt to FCF ratio value of 0.04, PDD belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
A Debt/Equity ratio of 0.02 indicates that PDD is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.02, PDD is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
A Current Ratio of 2.15 indicates that PDD has no problem at all paying its short term obligations.
PDD's Current ratio of 2.15 is fine compared to the rest 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.
The Quick ratio of PDD (2.15) is better than 81.25% of its industry peers.

Profitability Examination for NASDAQ:PDD

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:PDD has earned a 8 out of 10:

PDD's Return On Assets of 23.19% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
Looking at the Return On Equity, with a value of 38.87%, PDD belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
PDD's Return On Invested Capital of 31.27% 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 11.71%.
The last Return On Invested Capital (31.27%) for PDD is above the 3 year average (17.97%), which is a sign of increasing profitability.
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.
With an excellent Gross Margin value of 62.06%, PDD belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.

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

Check the latest full fundamental report of PDD for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.