PDD Holdings: Strategic Investments and Market Dynamics Present a Buying Opportunity Despite Short-Term Challenges

Benchmark Co. analyst Fawne Jiang has maintained their bullish stance on PDD stock, giving a Buy rating today.

Fawne Jiang’s rating is based on a combination of factors that reflect both the challenges and opportunities facing PDD Holdings. Despite the company’s recent margin miss and revenue shortfall, Jiang sees potential in PDD’s strategic investments aimed at enhancing the merchant ecosystem. These investments, although currently weighing on margins, are intended to strengthen the company’s long-term growth prospects by supporting merchant adaptability and expanding product offerings.
Jiang acknowledges the current pressures from global trade dynamics and domestic competition but believes these factors are already priced into the stock’s valuation. Trading at a high single-digit ex-cash forward P/E, the stock appears to reflect a depressed scenario, which presents a buying opportunity. Jiang maintains a Buy rating, recognizing the potential for mid-teens earnings growth over a normalized cycle, and adjusts the price target to $128 to account for the recent earnings reset.

In another report released today, Citi also maintained a Buy rating on the stock with a $152.00 price target.