NASDAQ:PDD is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: Jan 8, 2025

Discover PDD HOLDINGS INC (NASDAQ:PDD)—an undervalued stock our stock screener has picked out. NASDAQ:PDD demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

Valuation Examination for NASDAQ:PDD

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:PDD, the assigned 9 reflects its valuation:

Based on the Price/Earnings ratio of 9.23, the valuation of PDD can be described as reasonable.
Based on the Price/Earnings ratio, PDD is valued a bit cheaper than the industry average as 77.42% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.25. PDD is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 7.80, the valuation of PDD can be described as very cheap.
83.87% of the companies in the same industry are more expensive than PDD, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.54, PDD is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, PDD is valued cheaper than 87.10% of the companies in the same industry.
83.87% of the companies in the same industry are more expensive than PDD, based on the Price/Free Cash Flow ratio.
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 35.68% in the coming years.

Profitability Assessment of 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's Return On Assets of 23.19% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
PDD has a Return On Equity of 38.87%. This is amongst the best in the industry. PDD outperforms 93.55% of its industry peers.
With an excellent Return On Invested Capital value of 31.27%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PDD is significantly above the industry average of 11.65%.
The 3 year average ROIC (17.97%) for PDD is below the current ROIC(31.27%), indicating increased profibility in the last year.
PDD has a better Profit Margin (29.10%) than 100.00% of its industry peers.
Looking at the Operating Margin, with a value of 28.28%, PDD belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
PDD has a Gross Margin of 62.06%. This is amongst the best in the industry. PDD outperforms 83.87% of its industry peers.

How We Gauge Health for NASDAQ:PDD

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:

PDD has an Altman-Z score of 5.82. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.82, PDD belongs to the top of the industry, outperforming 80.65% of the companies in the same industry.
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's Debt to FCF ratio of 0.04 is amongst the best of the industry. PDD outperforms 93.55% of its industry peers.
A Debt/Equity ratio of 0.02 indicates that PDD is not too dependend on debt financing.
PDD has a better Debt to Equity ratio (0.02) than 77.42% of its industry peers.
PDD has a Current Ratio of 2.15. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.15, PDD is doing good in the industry, outperforming 70.97% of the companies in the same industry.
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's Quick ratio of 2.15 is amongst the best of the industry. PDD outperforms 83.87% of its industry peers.

Growth Assessment of NASDAQ:PDD

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:PDD has achieved a 8 out of 10:

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.
PDD shows a strong growth in Revenue. In the last year, the Revenue has grown by 87.39%.
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 23.38% 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 27.10% on average per year.

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

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

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.