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Why NASDAQ:PDD Is a Standout High-Growth Stock in a Consolidation Phase.

By Mill Chart

Last update: May 13, 2024

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.

Growth Analysis for NASDAQ:PDD

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:PDD was assigned a score of 8 for growth:

  • PDD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 68.74%, which is quite impressive.
  • Looking at the last year, PDD shows a very strong growth in Revenue. The Revenue has grown by 89.68%.
  • PDD shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 79.96% yearly.
  • Based on estimates for the next years, PDD will show a very strong growth in Earnings Per Share. The EPS will grow by 30.98% on average per year.
  • Based on estimates for the next years, PDD will show a very strong growth in Revenue. The Revenue will grow by 22.61% on average per year.

Assessing Health Metrics for NASDAQ:PDD

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:PDD, the assigned 7 for health provides valuable insights:

  • PDD has an Altman-Z score of 7.16. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
  • PDD has a better Altman-Z score (7.16) than 84.85% of its industry peers.
  • PDD has a debt to FCF ratio of 0.06. This is a very positive value and a sign of high solvency as it would only need 0.06 years to pay back of all of its debts.
  • The Debt to FCF ratio of PDD (0.06) is better than 93.94% of its industry peers.
  • A Debt/Equity ratio of 0.03 indicates that PDD is not too dependend on debt financing.
  • PDD's Debt to Equity ratio of 0.03 is fine compared to the rest of the industry. PDD outperforms 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.
  • With a decent Quick ratio value of 1.93, PDD is doing good in the industry, outperforming 78.79% of the companies in the same industry.

Profitability Examination for NASDAQ:PDD

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:PDD has achieved a 8:

  • Looking at the Return On Assets, with a value of 17.25%, PDD belongs to the top of the industry, outperforming 96.97% of the companies in the same industry.
  • With an excellent Return On Equity value of 32.06%, PDD belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 25.64%, PDD belongs to the top of the industry, outperforming 96.97% of the companies in the same industry.
  • The Average Return On Invested Capital over the past 3 years for PDD is significantly above the industry average of 11.54%.
  • 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.
  • Looking at the Profit Margin, with a value of 24.24%, PDD belongs to the top 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.

Looking at the Setup

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:

PDD has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 136.26, a Stop Loss order could be placed below this zone.

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

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

Our latest full technical report of PDD contains the most current technical analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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PDD HOLDINGS INC

NASDAQ:PDD (6/11/2024, 7:07:59 PM)

Premarket: 146.5 -0.43 (-0.29%)

146.93

-1.55 (-1.04%)

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