Looking for growth without the hefty price tag? Consider PDD HOLDINGS INC (NASDAQ:PDD).

Consider PDD HOLDINGS INC (NASDAQ:PDD) as an affordable growth stock, identified by our stock screening tool. PDD is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

Growth Analysis for 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. 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 78.54%, which is quite impressive.
• PDD shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 106.51% yearly.
• PDD shows a strong growth in Revenue. In the last year, the Revenue has grown by 59.04%.
• The Revenue has been growing by 67.20% on average over the past years. This is a very strong growth!
• Based on estimates for the next years, PDD will show a quite strong growth in Revenue. The Revenue will grow by 13.52% on average per year.

Assessing Valuation for PDD

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. PDD scores a 6 out of 10:

• With a Price/Earnings ratio of 9.16, the valuation of PDD can be described as very reasonable.
• Based on the Price/Earnings ratio, PDD is valued cheaply inside the industry as 83.87% of the companies are valued more expensively.
• The average S&P500 Price/Earnings ratio is at 28.98. PDD is valued rather cheaply when compared to this.
• With a Price/Forward Earnings ratio of 8.46, the valuation of PDD can be described as very reasonable.
• Based on the Price/Forward Earnings ratio, PDD is valued cheaper than 87.10% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 21.38. PDD is valued rather cheaply when compared to this.
• PDD has an outstanding profitability rating, which may justify a higher PE ratio.
• A more expensive valuation may be justified as PDD's earnings are expected to grow with 15.35% in the coming years.

Assessing Health for PDD

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. PDD scores a 9 out of 10:

• An Altman-Z score of 5.84 indicates that PDD is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 5.84, PDD belongs to the top of the industry, outperforming 87.10% of the companies in the same industry.
• There is no outstanding debt for PDD. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
• A Current Ratio of 2.21 indicates that PDD has no problem at all paying its short term obligations.
• With an excellent Current ratio value of 2.21, PDD belongs to the best of the industry, outperforming 80.65% of the companies in the same industry.
• A Quick Ratio of 2.21 indicates that PDD has no problem at all paying its short term obligations.
• With an excellent Quick ratio value of 2.21, PDD belongs to the best of the industry, outperforming 93.55% of the companies in the same industry.

Profitability Insights: PDD

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 PDD, the assigned 8 is a significant indicator of profitability:

• PDD's Return On Assets of 22.26% is amongst the best of the industry. PDD outperforms 96.77% of its industry peers.
• Looking at the Return On Equity, with a value of 35.89%, PDD belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 28.81%, PDD belongs to the top of the industry, outperforming 96.77% 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 11.80%.
• The last Return On Invested Capital (28.81%) for PDD is above the 3 year average (25.13%), which is a sign of increasing profitability.
• PDD has a better Profit Margin (28.55%) than 100.00% of its industry peers.
• In the last couple of years the Profit Margin of PDD has grown nicely.
• With an excellent Operating Margin value of 27.53%, PDD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
• PDD's Operating Margin has improved in the last couple of years.
• PDD's Gross Margin of 60.92% is amongst the best of the industry. PDD outperforms 83.87% of its industry peers.

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

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

Disclaimer

This article should in no way be interpreted as advice. 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.