Overall PDD gets a fundamental rating of 7 out of 10. We evaluated PDD against 30 industry peers in the Broadline Retail industry. Both the health and profitability get an excellent rating, making PDD a very profitable company, without any liquidiy or solvency issues. PDD scores decently on growth, while it is valued quite cheap. This could make an interesting combination. With these ratings, PDD could be worth investigating further for value and quality investing!.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year PDD was profitable.
PDD had a positive operating cash flow in the past year.
Of the past 5 years PDD 4 years were profitable.
PDD had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

PDD's Return On Assets of 16.66% is amongst the best of the industry. PDD outperforms 100.00% of its industry peers.
With an excellent Return On Equity value of 26.13%, PDD belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
PDD has a better Return On Invested Capital (19.72%) than 96.67% 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 9.28%.
The 3 year average ROIC (25.13%) for PDD is well above the current ROIC(19.72%). The reason for the recent decline needs to be investigated.

		Industry Rank	Sector Rank
ROA	16.66%
ROE	26.13%
ROIC	19.72%

ROA(3y)17.6%

ROA(5y)10.52%

ROE(3y)31.57%

ROE(5y)18.63%

ROIC(3y)25.13%

ROIC(5y)N/A

1.3 Margins

PDD has a better Profit Margin (24.43%) than 100.00% of its industry peers.
PDD's Profit Margin has improved in the last couple of years.
PDD has a Operating Margin of 22.10%. This is amongst the best in the industry. PDD outperforms 96.67% of its industry peers.
In the last couple of years the Operating Margin of PDD has grown nicely.
PDD has a better Gross Margin (56.65%) than 83.33% of its industry peers.
In the last couple of years the Gross Margin of PDD has declined.

		Industry Rank	Sector Rank
OM	22.1%
PM (TTM)	24.43%
GM	56.65%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PDD is creating value.
The number of shares outstanding for PDD has been increased compared to 1 year ago.
PDD has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, PDD has an improved debt to assets ratio.

2.2 Solvency

PDD has an Altman-Z score of 5.20. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
PDD has a better Altman-Z score (5.20) than 83.33% of its industry peers.
PDD has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0.05
Altman-Z	5.2

ROIC/WACC2.31

WACC8.53%

2.3 Liquidity

A Current Ratio of 2.36 indicates that PDD has no problem at all paying its short term obligations.
PDD has a better Current ratio (2.36) than 73.33% of its industry peers.
PDD has a Quick Ratio of 2.36. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.36, PDD belongs to the top of the industry, outperforming 86.67% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.36
Quick Ratio	2.36

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for PDD have decreased by -6.46% in the last year.
PDD shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 106.51% yearly.
Looking at the last year, PDD shows a quite strong growth in Revenue. The Revenue has grown by 12.48% in the last year.
PDD shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 67.20% yearly.

EPS 1Y (TTM)-6.46%

EPS 3Y106.51%

EPS 5YN/A

EPS Q2Q%13.39%

Revenue 1Y (TTM)12.48%

Revenue growth 3Y61.24%

Revenue growth 5Y67.2%

Sales Q2Q%8.98%

3.2 Future

The Earnings Per Share is expected to grow by 7.01% on average over the next years.
PDD is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.05% yearly.

EPS Next Y-6.68%

EPS Next 2Y4.01%

EPS Next 3Y8.03%

EPS Next 5Y7.01%

Revenue Next Year9.19%

Revenue Next 2Y12.03%

Revenue Next 3Y12.05%

Revenue Next 5Y10.05%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 9.91, the valuation of PDD can be described as reasonable.
Based on the Price/Earnings ratio, PDD is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of PDD to the average of the S&P500 Index (27.21), we can say PDD is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.28, the valuation of PDD can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PDD indicates a rather cheap valuation: PDD is cheaper than 86.67% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of PDD to the average of the S&P500 Index (25.98), we can say PDD is valued rather cheaply.

		Industry Rank	Sector Rank
PE	9.91
Fwd PE	8.28

4.2 Price Multiples

PDD's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PDD is cheaper than 96.67% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PDD indicates a somewhat cheap valuation: PDD is cheaper than 80.00% of the companies listed in the same industry.