For those who appreciate value investing, NASDAQ:PDD is a compelling option with its solid fundamentals.

Last update: Jan 30, 2025

Uncover the hidden value in PDD HOLDINGS INC (NASDAQ:PDD) as our stock screening tool recommends it as an undervalued choice. NASDAQ:PDD maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

ChartMill's Evaluation of Valuation

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:

The Price/Earnings ratio is 10.18, which indicates a very decent valuation of PDD.
PDD's Price/Earnings ratio is a bit cheaper when compared to the industry. PDD is cheaper than 77.42% of the companies in the same industry.
When comparing the Price/Earnings ratio of PDD to the average of the S&P500 Index (28.28), we can say PDD is valued rather cheaply.
The Price/Forward Earnings ratio is 8.60, which indicates a very decent valuation of PDD.
83.87% of the companies in the same industry are more expensive than PDD, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 91.29. PDD is valued rather cheaply when compared to this.
Based on the Enterprise Value to EBITDA ratio, PDD is valued cheaply inside the industry as 80.65% of the companies are valued more expensively.
83.87% of the companies in the same industry are more expensive than PDD, based on the Price/Free Cash Flow ratio.
The 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.
PDD's earnings are expected to grow with 35.68% in the coming years. This may justify a more expensive valuation.

Profitability Examination for 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:

PDD has a better Return On Assets (23.19%) than 100.00% of its industry peers.
PDD's Return On Equity of 38.87% is amongst the best of the industry. PDD outperforms 96.77% 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.
PDD had an Average Return On Invested Capital over the past 3 years of 17.97%. This is significantly above the industry average of 11.22%.
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.
PDD's Gross Margin of 62.06% is amongst the best of the industry. PDD outperforms 83.87% of its industry peers.

A Closer Look at Health for NASDAQ:PDD

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:PDD scores a 9 out of 10:

PDD has an Altman-Z score of 6.15. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 6.15, PDD belongs to the best 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.
Looking at the Debt to FCF ratio, with a value of 0.04, PDD belongs to the top of the industry, outperforming 93.55% of the companies in the same industry.
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 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.
PDD's Current ratio of 2.15 is fine compared to the rest of the industry. PDD outperforms 70.97% of its industry peers.
A Quick Ratio of 2.15 indicates that PDD has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 2.15, PDD belongs to the best of the industry, outperforming 83.87% of the companies in the same industry.

Evaluating Growth: NASDAQ:PDD

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:PDD scores 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.
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 23.38% on average per year.
The Revenue is expected to grow by 27.10% on average over the next years. This is a very strong growth

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

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

Keep in mind

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.