Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


PDD HOLDINGS INC

Nasdaq / Consumer Discretionary / Broadline Retail

Fundamental Rating

7

Overall PDD gets a fundamental rating of 7 out of 10. We evaluated PDD against 31 industry peers in the Broadline Retail industry. PDD gets an excellent profitability rating and is at the same time showing great financial health properties. PDD is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings could make PDD a good candidate for growth and quality investing.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year PDD was profitable.
Of the past 5 years PDD 4 years were profitable.
PDD had a positive operating cash flow in 4 of the past 5 years.
PDD Yearly Net Income VS EBIT VS OCF VS FCFPDD Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20B 40B 60B 80B 100B

1.2 Ratios

PDD's Return On Assets of 22.26% is amongst the best of the industry. PDD outperforms 96.77% of its industry peers.
PDD's Return On Equity of 35.89% is amongst the best of the industry. PDD outperforms 90.32% of its industry peers.
The Return On Invested Capital of PDD (28.81%) is better than 96.77% of its industry peers.
PDD had an Average Return On Invested Capital over the past 3 years of 25.13%. This is significantly above the industry average of 11.94%.
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.
Industry RankSector Rank
ROA 22.26%
ROE 35.89%
ROIC 28.81%
ROA(3y)17.6%
ROA(5y)10.52%
ROE(3y)31.57%
ROE(5y)18.63%
ROIC(3y)25.13%
ROIC(5y)N/A
PDD Yearly ROA, ROE, ROICPDD Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 -40 -60 -80

1.3 Margins

PDD's Profit Margin of 28.55% is amongst the best of the industry. PDD outperforms 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 has a Gross Margin of 60.92%. This is amongst the best in the industry. PDD outperforms 83.87% of its industry peers.
In the last couple of years the Gross Margin of PDD has declined.
Industry RankSector Rank
OM 27.53%
PM (TTM) 28.55%
GM 60.92%
OM growth 3Y55.36%
OM growth 5YN/A
PM growth 3Y51.14%
PM growth 5YN/A
GM growth 3Y-2.75%
GM growth 5Y-5.06%
PDD Yearly Profit, Operating, Gross MarginsPDD Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50 -50

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9

2. Health

2.1 Basic Checks

PDD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
PDD has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PDD has more shares outstanding
Compared to 1 year ago, PDD has an improved debt to assets ratio.
PDD Yearly Shares OutstandingPDD Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B
PDD Yearly Total Debt VS Total AssetsPDD Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 100B 200B 300B 400B 500B

2.2 Solvency

An Altman-Z score of 6.08 indicates that PDD is not in any danger for bankruptcy at the moment.
The Altman-Z score of PDD (6.08) is better than 87.10% of its industry peers.
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.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF N/A
Altman-Z 6.08
ROIC/WACC3.76
WACC7.66%
PDD Yearly LT Debt VS Equity VS FCFPDD Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 100B 200B 300B

2.3 Liquidity

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.
PDD has a Quick Ratio of 2.21. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
PDD has a better Quick ratio (2.21) than 93.55% of its industry peers.
Industry RankSector Rank
Current Ratio 2.21
Quick Ratio 2.21
PDD Yearly Current Assets VS Current LiabilitesPDD Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 100B 200B 300B 400B

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8

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 78.54% over the past year.
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%.
PDD shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 67.20% yearly.
EPS 1Y (TTM)78.54%
EPS 3Y106.51%
EPS 5YN/A
EPS Q2Q%16.34%
Revenue 1Y (TTM)59.04%
Revenue growth 3Y61.24%
Revenue growth 5Y67.2%
Sales Q2Q%24.45%

3.2 Future

PDD is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.36% yearly.
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.
EPS Next Y8.25%
EPS Next 2Y14.69%
EPS Next 3Y15.35%
EPS Next 5Y5.36%
Revenue Next Year18.82%
Revenue Next 2Y18.57%
Revenue Next 3Y16.95%
Revenue Next 5Y13.52%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
PDD Yearly Revenue VS EstimatesPDD Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 200B 400B 600B
PDD Yearly EPS VS EstimatesPDD Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 0 20 40 60 80 100

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6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 10.19, which indicates a very decent valuation of PDD.
Based on the Price/Earnings ratio, PDD is valued cheaper than 80.65% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 24.83. PDD is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 9.41, the valuation of PDD can be described as very reasonable.
Based on the Price/Forward Earnings ratio, PDD is valued cheaply inside the industry as 87.10% of the companies are valued more expensively.
PDD is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.94, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 10.19
Fwd PE 9.41
PDD Price Earnings VS Forward Price EarningsPDD Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Industry RankSector Rank
P/FCF N/A
EV/EBITDA N/A
PDD Per share dataPDD EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

PDD's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 15.35% in the coming years.
PEG (NY)1.24
PEG (5Y)N/A
EPS Next 2Y14.69%
EPS Next 3Y15.35%

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0

5. Dividend

5.1 Amount

PDD does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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