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Is NASDAQ:PDD on the Verge of a Major Breakout as a Strong Growth Stock?

By Mill Chart

Last update: Apr 19, 2024

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if PDD HOLDINGS INC (NASDAQ:PDD) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted PDD HOLDINGS INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Evaluating Growth: NASDAQ:PDD

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 68.74% over the past year.
  • Looking at the last year, PDD shows a very strong growth in Revenue. The Revenue has grown by 89.68%.
  • 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.
  • The Earnings Per Share is expected to grow by 30.98% on average over the next years. This is a very strong growth
  • The Revenue is expected to grow by 24.65% on average over the next years. This is a very strong growth

Health Analysis for NASDAQ:PDD

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:PDD was assigned a score of 7 for health:

  • An Altman-Z score of 6.14 indicates that PDD is not in any danger for bankruptcy at the moment.
  • The Altman-Z score of PDD (6.14) is better than 87.88% of its industry peers.
  • The Debt to FCF ratio of PDD is 0.06, which is an excellent value as it means it would take PDD, only 0.06 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 0.06, PDD belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
  • A Debt/Equity ratio of 0.03 indicates that PDD is not too dependend on debt financing.
  • PDD has a better Debt to Equity ratio (0.03) than 78.79% of its industry peers.
  • PDD's Current ratio of 1.93 is fine compared to the rest of the industry. PDD outperforms 66.67% of its industry peers.
  • PDD has a Quick ratio of 1.93. This is in the better half of the industry: PDD outperforms 78.79% of its industry peers.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:PDD has earned a 8 out of 10:

  • The Return On Assets of PDD (17.25%) is better than 96.97% of its industry peers.
  • Looking at the Return On Equity, with a value of 32.06%, PDD belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
  • PDD has a Return On Invested Capital of 25.64%. This is amongst the best in the industry. PDD outperforms 96.97% 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 last Return On Invested Capital (25.64%) for PDD is above the 3 year average (17.97%), which is a sign of increasing profitability.
  • With an excellent Profit Margin value of 24.24%, PDD belongs to the best of the industry, outperforming 96.97% of the companies in the same industry.
  • With an excellent Operating Margin value of 23.70%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
  • PDD's Gross Margin of 62.96% is amongst the best of the industry. PDD outperforms 84.85% of its industry peers.

How do we evaluate the setup for NASDAQ:PDD?

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, NASDAQ:PDD exhibits a 7 setup rating, indicating its consolidation status in recent days and weeks.

Although the technical rating is bad, PDD does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

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

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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PDD HOLDINGS INC

NASDAQ:PDD (5/29/2024, 7:23:02 PM)

Premarket: 151.15 -0.12 (-0.08%)

151.27

+1.55 (+1.04%)

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