PDD Holdings (PDD) AI Stock Analysis

• Market Cap: $178.55B
• Dividend Yield: N/A
• Average Volume (3M): 10.38M
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.71
• Revenue Growth: 20.09%
• EPS Growth: -1.83%
• Country: US
• Employees: 23,465
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 3.10
• Shares Outstanding: 1,419,646,500
• 10 Day Avg. Volume: 11,309,849
• 30 Day Avg. Volume: 10,379,647
• PEG Ratio: 0.10
• Price to Book (P/B): 3.13
• Price to Sales (P/S): 2.49
• P/FCF Ratio: 8.10
• Enterprise Value/Market Cap: 0.52
• Enterprise Value/Revenue: 0.23
• Enterprise Value/Gross Profit: 0.40
• Enterprise Value/Ebitda: 0.91
• 1Y Price Target: $144.56
• Price Target Upside: 12.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 79 Outperform
• Price Target: $147.00 ▲(14.33% Upside)

PDD Holdings' overall stock score is driven by strong financial performance and bullish technical indicators. The company's strategic investments in its ecosystem are promising for long-term growth but present short-term profitability challenges. The stock's valuation is reasonable, though the lack of a dividend yield may deter income-focused investors.

Positive Factors

Strong Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and competitiveness.

Merchant Ecosystem Investment

Significant investment in merchant support fosters a robust ecosystem, enhancing platform sustainability and merchant loyalty over time.

Balance Sheet Health

A strong balance sheet with low leverage provides financial stability and flexibility, enabling strategic investments and weathering economic fluctuations.

Negative Factors

Operating Profit Decline

Declining operating profit due to increased investments and competition may pressure margins, affecting short-term financial performance and investor confidence.

Increased Costs

Rising costs, including fulfillment and processing fees, could erode profit margins, challenging the company's ability to maintain profitability.

Intensified Competition

Increased competition may hinder market share expansion and pressure pricing strategies, potentially affecting long-term growth prospects.

PDD Holdings Business Overview & Revenue Model

Company Description

PDD Holdings (PDD) is a Chinese multinational commerce group that operates through its flagship e-commerce platform, Pinduoduo. The company primarily engages in online retail, providing a variety of products ranging from groceries to electronics, while also leveraging social commerce features. PDD focuses on creating a cost-effective shopping experience by utilizing a unique group buying model that encourages users to collaborate in making purchases, thus driving volume and reducing costs. Its ecosystem includes a suite of services for merchants, facilitating seamless transactions and enhancing customer engagement.

How the Company Makes Money

PDD generates revenue primarily through its e-commerce platform by charging merchants for advertising services, including pay-per-click and display ads that increase visibility on the site. Additionally, the company earns money through transaction fees from sales made on its platform. Another key revenue stream comes from its membership program, which provides users with exclusive discounts and promotions, further incentivizing purchases. PDD also partners with various brands and retailers, enhancing its product offerings and driving traffic to its platform. The combination of advertising revenue, transaction fees, and membership subscriptions contributes significantly to the company's earnings.

PDD Holdings Financial Statement Overview

Summary

PDD Holdings shows strong financial health with robust revenue growth and profitability. The balance sheet is solid with low leverage, and the company effectively utilizes equity to generate returns. However, a decline in free cash flow growth and slightly decreased profit margins indicate rising operational costs.

Income Statement

PDD Holdings has demonstrated strong revenue growth and profitability. The TTM (Trailing-Twelve-Months) revenue growth rate is positive, indicating a continued upward trajectory. Gross profit margins have slightly decreased from the previous year but remain robust. The net profit margin is healthy, reflecting efficient cost management. However, there is a slight decline in EBIT and EBITDA margins compared to the previous year, which could indicate rising operational costs.

Balance Sheet

The company's balance sheet is strong, with a low debt-to-equity ratio indicating conservative leverage. Return on equity is impressive, showcasing effective use of shareholder funds to generate profits. The equity ratio is solid, reflecting a stable financial position with a significant portion of assets financed by equity.

Cash Flow

PDD Holdings has a strong operating cash flow, but there is a notable decline in free cash flow growth in the TTM period. The operating cash flow to net income ratio is moderate, suggesting that cash generation from operations is aligned with reported earnings. The free cash flow to net income ratio remains high, indicating efficient conversion of profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	409.62B	393.84B	247.64B	130.56B	93.95B	59.49B
Gross Profit	235.31B	239.94B	155.92B	99.10B	62.23B	40.21B
EBITDA	102.06B	109.13B	59.48B	32.63B	8.39B	-8.73B
Net Income	97.92B	112.43B	60.03B	31.54B	7.77B	-7.18B
Balance Sheet
Total Assets	567.16B	505.03B	348.08B	237.12B	181.21B	158.91B
Cash, Cash Equivalents and Short-Term Investments	387.13B	331.56B	217.21B	149.44B	92.94B	86.97B
Total Debt	10.96B	10.61B	10.17B	16.93B	12.76B	16.97B
Total Liabilities	205.29B	191.72B	160.84B	119.35B	106.10B	98.73B
Stockholders Equity	361.86B	313.31B	187.24B	117.77B	75.11B	60.18B
Cash Flow
Free Cash Flow	93.26B	120.96B	93.58B	6.40B	25.50B	28.15B
Operating Cash Flow	94.23B	121.93B	94.16B	7.03B	28.78B	28.20B
Investing Cash Flow	-80.85B	-118.36B	-55.43B	-3.24B	-35.56B	-38.36B
Financing Cash Flow	978.00K	1.16M	-8.96B	10.08M	-1.88B	51.80B

PDD Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 128.57
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PDD, the sentiment is Positive. The current price of 128.57 is above the 20-day moving average (MA) of 126.03, above the 50-day MA of 119.06, and above the 200-day MA of 110.98, indicating a bullish trend. The MACD of 3.36 indicates Negative momentum. The RSI at 58.42 is Neutral, neither overbought nor oversold. The STOCH value of 57.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PDD.

PDD Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PDD	79 Outperform	$178.55B	14.02	31.78%	―	20.09%	-1.83%
BABA	79 Outperform	390.66B	18.41	12.88%	1.21%	5.48%	128.65%
SE	78 Outperform	114.24B	97.91	12.43%	―	34.12%	0.00%
MELI	74 Outperform	124.75B	60.76	35.94%	―	38.27%	46.21%
JD	74 Outperform	55.24B	9.91	17.28%	2.89%	14.61%	32.78%
CPNG	62 Neutral	58.92B	162.74	7.79%	―	18.69%	-65.55%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

PDD Holdings Corporate Events

PDD Holdings Reports Q2 2025 Financial Results with Revenue Growth Amid Profit Decline

PDD Holdings announced its unaudited financial results for the second quarter of 2025, revealing a 7% increase in total revenues to RMB103,984.8 million compared to the same quarter in 2024. Despite the revenue growth, the company experienced a 21% decrease in operating profit and a 4% decrease in net income attributable to ordinary shareholders. The company has been investing heavily in merchant support initiatives, which has impacted short-term profitability but is expected to foster long-term value creation.

PDD Holdings Appoints New Auditor for 2025

On July 23, 2025, PDD Holdings Inc. announced the appointment of Ernst & Young, based in Hong Kong, as its independent registered public accounting firm. This change, from their previous auditor Ernst & Young Hua Ming LLP, is set to impact the audits of the company’s financial statements and internal control over financial reporting for the year ending December 31, 2025. The appointment signifies a strategic shift in the company’s auditing process, potentially affecting its operational transparency and stakeholder confidence.