NASDAQ:PDD: a strong growth stock preparing for the next leg up?.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether PDD HOLDINGS INC (NASDAQ:PDD) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but PDD HOLDINGS INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Understanding NASDAQ:PDD's Growth

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:PDD has earned a 8 for growth:

• The Earnings Per Share has grown by an impressive 85.18% over the past year.
• Looking at the last year, PDD shows a very strong growth in Revenue. The Revenue has grown by 58.93%.
• The Revenue has been growing by 137.06% on average over the past years. This is a very strong growth!
• PDD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.06% yearly.
• The Revenue is expected to grow by 20.30% on average over the next years. This is a very strong growth

How We Gauge Health for NASDAQ:PDD

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:PDD, the assigned 7 reflects its health status:

• An Altman-Z score of 6.63 indicates that PDD is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 6.63, PDD belongs to the top of the industry, outperforming 91.18% of the companies in the same industry.
• The Debt to FCF ratio of PDD is 0.26, which is an excellent value as it means it would take PDD, only 0.26 years of fcf income to pay off all of its debts.
• PDD's Debt to FCF ratio of 0.26 is amongst the best of the industry. PDD outperforms 91.18% of its industry peers.
• PDD has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
• PDD has a better Debt to Equity ratio (0.01) than 76.47% of its industry peers.
• With a decent Current ratio value of 1.91, PDD is doing good in the industry, outperforming 61.76% of the companies in the same industry.
• Looking at the Quick ratio, with a value of 1.91, PDD is in the better half of the industry, outperforming 73.53% of the companies in the same industry.

Looking at the Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:PDD, the assigned 7 is a significant indicator of profitability:

• PDD has a Return On Assets of 15.04%. This is amongst the best in the industry. PDD outperforms 97.06% of its industry peers.
• Looking at the Return On Equity, with a value of 28.38%, PDD belongs to the top of the industry, outperforming 94.12% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 22.08%, PDD belongs to the top of the industry, outperforming 97.06% of the companies in the same industry.
• PDD has a better Profit Margin (24.96%) than 100.00% of its industry peers.
• PDD has a Operating Margin of 23.72%. This is amongst the best in the industry. PDD outperforms 97.06% of its industry peers.
• Looking at the Gross Margin, with a value of 72.07%, PDD belongs to the top of the industry, outperforming 91.18% of the companies in the same industry.
• In the last couple of years the Gross Margin of PDD has grown nicely.

How do we evaluate the setup for NASDAQ:PDD?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:PDD scores a 7 out of 10:

Besides having an excellent technical rating, PDD also presents a decent setup pattern. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 105.54, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of PDD

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

Disclaimer

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.