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Looking for growth without the hefty price tag? Consider NASDAQ:PDD.

By Mill Chart

Last update: May 22, 2024

PDD HOLDINGS INC (NASDAQ:PDD) was identified as an affordable growth stock by our stock screener. NASDAQ:PDD is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Growth Examination 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.
  • The Revenue has grown by 89.68% in the past year. This is a very strong growth!
  • The Revenue has been growing by 79.96% on average over the past years. This is a very strong growth!
  • The Earnings Per Share is expected to grow by 30.98% on average over the next years. This is a very strong growth
  • 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.

How We Gauge Valuation for NASDAQ:PDD

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:PDD has achieved a 6 out of 10:

  • PDD's Price/Earnings ratio is a bit cheaper when compared to the industry. PDD is cheaper than 62.50% of the companies in the same industry.
  • PDD is valuated rather cheaply when we compare the Price/Earnings ratio to 28.52, which is the current average of the S&P500 Index.
  • PDD's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PDD is cheaper than 71.88% of the companies in the same industry.
  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • The excellent profitability rating of PDD may justify a higher PE ratio.
  • A more expensive valuation may be justified as PDD's earnings are expected to grow with 30.98% in the coming years.

Health Analysis for NASDAQ:PDD

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:PDD has earned a 8 out of 10:

  • PDD has an Altman-Z score of 7.51. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
  • PDD has a better Altman-Z score (7.51) than 84.38% 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.
  • Looking at the Debt to FCF ratio, with a value of 0.06, PDD belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
  • PDD has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
  • Looking at the Debt to Equity ratio, with a value of 0.03, PDD belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
  • PDD's Current ratio of 1.93 is fine compared to the rest of the industry. PDD outperforms 68.75% of its industry peers.
  • With an excellent Quick ratio value of 1.93, PDD belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.

Analyzing Profitability Metrics

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 8 is a significant indicator of profitability:

  • PDD has a better Return On Assets (17.25%) than 96.88% of its industry peers.
  • PDD has a Return On Equity of 32.06%. This is amongst the best in the industry. PDD outperforms 90.63% of its industry peers.
  • PDD's Return On Invested Capital of 25.64% is amongst the best of the industry. PDD outperforms 96.88% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for PDD is significantly above the industry average of 11.30%.
  • 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.
  • PDD has a Profit Margin of 24.24%. This is amongst the best in the industry. PDD outperforms 96.88% of its industry peers.
  • The Operating Margin of PDD (23.70%) is better than 100.00% of its industry peers.
  • With an excellent Gross Margin value of 62.96%, PDD belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.

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

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

Keep in mind

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.

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PDD HOLDINGS INC

NASDAQ:PDD (6/20/2024, 5:13:48 PM)

After market: 144.3 +0.16 (+0.11%)

144.14

-0.04 (-0.03%)

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