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PDD HOLDINGS INC

Nasdaq / Consumer Discretionary / Broadline Retail

Fundamental Rating

7

PDD gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 31 industry peers in the Broadline Retail industry. Both the health and profitability get an excellent rating, making PDD a very profitable company, without any liquidiy or solvency issues. PDD is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make PDD suitable for growth and quality investing!


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

PDD had positive earnings in the past year.
PDD had positive earnings in 4 of the past 5 years.
Of the past 5 years PDD 4 years had a positive operating cash flow.
PDD Yearly Net Income VS EBIT VS OCF VS FCFPDD Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20B 40B 60B 80B 100B

1.2 Ratios

Looking at the Return On Assets, with a value of 22.26%, PDD belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
PDD has a Return On Equity of 35.89%. This is amongst the best in the industry. PDD outperforms 90.32% of its industry peers.
With an excellent Return On Invested Capital value of 28.81%, PDD belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
PDD had an Average Return On Invested Capital over the past 3 years of 25.13%. This is significantly above the industry average of 11.67%.
The 3 year average ROIC (25.13%) for PDD is below the current ROIC(28.81%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 22.26%
ROE 35.89%
ROIC 28.81%
ROA(3y)17.6%
ROA(5y)10.52%
ROE(3y)31.57%
ROE(5y)18.63%
ROIC(3y)25.13%
ROIC(5y)N/A
PDD Yearly ROA, ROE, ROICPDD Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 -40 -60 -80

1.3 Margins

The Profit Margin of PDD (28.55%) is better than 100.00% of its industry peers.
PDD's Profit Margin has improved in the last couple of years.
PDD's Operating Margin of 27.53% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
PDD's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 60.92%, PDD belongs to the best of the industry, outperforming 83.87% of the companies in the same industry.
In the last couple of years the Gross Margin of PDD has declined.
Industry RankSector Rank
OM 27.53%
PM (TTM) 28.55%
GM 60.92%
OM growth 3Y55.36%
OM growth 5YN/A
PM growth 3Y51.14%
PM growth 5YN/A
GM growth 3Y-2.75%
GM growth 5Y-5.06%
PDD Yearly Profit, Operating, Gross MarginsPDD Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50 -50

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9

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PDD is creating value.
PDD has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PDD has more shares outstanding
Compared to 1 year ago, PDD has an improved debt to assets ratio.
PDD Yearly Shares OutstandingPDD Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B
PDD Yearly Total Debt VS Total AssetsPDD Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 100B 200B 300B 400B 500B

2.2 Solvency

An Altman-Z score of 5.52 indicates that PDD is not in any danger for bankruptcy at the moment.
PDD has a Altman-Z score of 5.52. This is amongst the best in the industry. PDD outperforms 87.10% of its industry peers.
PDD has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF N/A
Altman-Z 5.52
ROIC/WACC3.56
WACC8.1%
PDD Yearly LT Debt VS Equity VS FCFPDD Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 100B 200B 300B

2.3 Liquidity

PDD has a Current Ratio of 2.21. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
PDD has a better Current ratio (2.21) than 80.65% of its industry peers.
A Quick Ratio of 2.21 indicates that PDD has no problem at all paying its short term obligations.
PDD's Quick ratio of 2.21 is amongst the best of the industry. PDD outperforms 93.55% of its industry peers.
Industry RankSector Rank
Current Ratio 2.21
Quick Ratio 2.21
PDD Yearly Current Assets VS Current LiabilitesPDD Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 100B 200B 300B 400B

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8

3. Growth

3.1 Past

PDD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 78.54%, which is quite impressive.
The Earnings Per Share has been growing by 106.51% on average over the past years. This is a very strong growth
The Revenue has grown by 59.04% 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 67.20% on average per year.
EPS 1Y (TTM)78.54%
EPS 3Y106.51%
EPS 5YN/A
EPS Q2Q%16.34%
Revenue 1Y (TTM)59.04%
Revenue growth 3Y61.24%
Revenue growth 5Y67.2%
Sales Q2Q%24.45%

3.2 Future

The Earnings Per Share is expected to grow by 5.36% on average over the next years.
The Revenue is expected to grow by 13.52% on average over the next years. This is quite good.
EPS Next Y8.25%
EPS Next 2Y14.69%
EPS Next 3Y15.35%
EPS Next 5Y5.36%
Revenue Next Year19.23%
Revenue Next 2Y19.08%
Revenue Next 3Y17.44%
Revenue Next 5Y13.52%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
PDD Yearly Revenue VS EstimatesPDD Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 200B 400B 600B
PDD Yearly EPS VS EstimatesPDD Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 0 20 40 60 80 100

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6

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 8.33, the valuation of PDD can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of PDD indicates a rather cheap valuation: PDD is cheaper than 80.65% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.63. PDD is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 7.69, the valuation of PDD can be described as very cheap.
87.10% 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 20.85, PDD is valued rather cheaply.
Industry RankSector Rank
PE 8.33
Fwd PE 7.69
PDD Price Earnings VS Forward Price EarningsPDD Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Industry RankSector Rank
P/FCF N/A
EV/EBITDA N/A
PDD Per share dataPDD EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

PDD's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of PDD may justify a higher PE ratio.
PDD's earnings are expected to grow with 15.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.01
PEG (5Y)N/A
EPS Next 2Y14.69%
EPS Next 3Y15.35%

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0

5. Dividend

5.1 Amount

No dividends for PDD!.
Industry RankSector Rank
Dividend Yield N/A

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