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NASDAQ:PDD stands out as a stock that provides good value for the fundamentals it showcases.

By Mill Chart

Last update: Jul 1, 2024

Our stock screening tool has pinpointed PDD HOLDINGS INC (NASDAQ:PDD) as an undervalued stock. NASDAQ:PDD maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.


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Deciphering NASDAQ:PDD's Valuation Rating

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:PDD has received a 8 out of 10:

  • Based on the Price/Earnings ratio, PDD is valued a bit cheaper than the industry average as 63.64% of the companies are valued more expensively.
  • PDD's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.36.
  • PDD is valuated reasonably with a Price/Forward Earnings ratio of 8.43.
  • Based on the Price/Forward Earnings ratio, PDD is valued a bit cheaper than the industry average as 78.79% of the companies are valued more expensively.
  • The average S&P500 Price/Forward Earnings ratio is at 20.16. PDD is valued rather cheaply when compared to this.
  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 63.64% of the companies listed in the same industry.
  • Based on the Price/Free Cash Flow ratio, PDD is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • PDD has an outstanding profitability rating, which may justify a higher PE ratio.
  • PDD's earnings are expected to grow with 44.53% in the coming years. This may justify a more expensive valuation.

Profitability Analysis 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:

  • PDD's Return On Assets of 21.15% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
  • The Return On Equity of PDD (36.54%) is better than 93.94% of its industry peers.
  • With an excellent Return On Invested Capital value of 29.27%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
  • PDD had an Average Return On Invested Capital over the past 3 years of 17.97%. This is significantly above the industry average of 11.29%.
  • The last Return On Invested Capital (29.27%) for PDD is above the 3 year average (17.97%), which is a sign of increasing profitability.
  • PDD's Profit Margin of 26.93% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
  • With an excellent Operating Margin value of 26.19%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
  • PDD has a better Gross Margin (61.83%) than 84.85% of its industry peers.

How do we evaluate the 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 9 reflects its health status:

  • An Altman-Z score of 7.43 indicates that PDD is not in any danger for bankruptcy at the moment.
  • The Altman-Z score of PDD (7.43) is better than 90.91% of its industry peers.
  • The Debt to FCF ratio of PDD is 0.05, which is an excellent value as it means it would take PDD, only 0.05 years of fcf income to pay off all of its debts.
  • PDD has a better Debt to FCF ratio (0.05) than 93.94% of its industry peers.
  • PDD has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
  • With an excellent Debt to Equity ratio value of 0.02, PDD belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
  • PDD has a Current Ratio of 2.09. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
  • PDD has a better Current ratio (2.09) than 75.76% of its industry peers.
  • A Quick Ratio of 2.09 indicates that PDD has no problem at all paying its short term obligations.
  • Looking at the Quick ratio, with a value of 2.09, PDD belongs to the top of the industry, outperforming 84.85% of the companies in the same industry.

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:

  • The Earnings Per Share has grown by an impressive 91.34% over the past year.
  • The Revenue has grown by 105.55% in the past year. This is a very strong growth!
  • 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.
  • PDD is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 30.86% yearly.
  • Based on estimates for the next years, PDD will show a very strong growth in Revenue. The Revenue will grow by 26.32% on average per year.

More Decent Value stocks can be found in our Decent Value screener.

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

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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