PDD HOLDINGS INC (PDD) Stock Fundamental Analysis
NASDAQ:PDD - Nasdaq - US7223041028 - ADR - Currency: USD
We assign a fundamental rating of 8 out of 10 to PDD. PDD was compared to 31 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. An interesting combination arises when we look at growth and value: PDD is growing strongly while it also seems undervalued. These ratings could make PDD a good candidate for value and growth and quality investing.
1. Profitability
1.1 Basic Checks
In the past year PDD was profitable.
In the past year PDD had a positive cash flow from operations.
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
The Return On Assets of PDD (22.26%) is better than 100.00% of its industry peers.
PDD has a better Return On Equity (35.89%) than 93.55% of its industry peers.
Looking at the Return On Invested Capital, with a value of 28.81%, PDD belongs to the top 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 25.13%. This is significantly above the industry average of 11.56%.
The 3 year average ROIC (25.13%) for PDD is below the current ROIC(28.81%), indicating increased profibility in the last year.
| Industry Rank | Sector 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
1.3 Margins
Looking at the Profit Margin, with a value of 28.55%, PDD belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of PDD has grown nicely.
PDD has a better Operating Margin (27.53%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of PDD has grown nicely.
PDD has a better Gross Margin (60.92%) than 83.87% of its industry peers.
PDD's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector 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%
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.
Compared to 1 year ago, PDD has more shares outstanding
The number of shares outstanding for PDD has been increased compared to 5 years ago.
The debt/assets ratio for PDD has been reduced compared to a year ago.
2.2 Solvency
PDD has an Altman-Z score of 5.69. This indicates that PDD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.69, PDD belongs to the top of the industry, outperforming 83.87% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.04 | ||
| Altman-Z | 5.69 |
ROIC/WACC3.51
WACC8.21%
2.3 Liquidity
PDD has a Current Ratio of 2.21. This indicates that PDD is financially healthy and has no problem in meeting its short term obligations.
PDD's Current ratio of 2.21 is amongst the best of the industry. PDD outperforms 80.65% of its industry peers.
A Quick Ratio of 2.21 indicates that PDD has no problem at all paying its short term obligations.
PDD's Quick ratio of 2.21 is amongst the best of the industry. PDD outperforms 90.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.21 | ||
| Quick Ratio | 2.21 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.77% over the past year.
Measured over the past years, PDD shows a very strong growth in Earnings Per Share. The EPS has been growing by 106.51% on average per year.
PDD shows a strong growth in Revenue. In the last year, the Revenue has grown by 59.04%.
Measured over the past years, PDD shows a very strong growth in Revenue. The Revenue has been growing by 67.20% on average per year.
EPS 1Y (TTM)21.77%
EPS 3Y106.51%
EPS 5YN/A
EPS Q2Q%-45.82%
Revenue 1Y (TTM)59.04%
Revenue growth 3Y61.24%
Revenue growth 5Y67.2%
Sales Q2Q%9.28%
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.
The Revenue is expected to grow by 13.52% on average over the next years. This is quite good.
EPS Next Y8.24%
EPS Next 2Y14.63%
EPS Next 3Y15.2%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 9.48 indicates a reasonable valuation of PDD.
Compared to the rest of the industry, the Price/Earnings ratio of PDD indicates a rather cheap valuation: PDD is cheaper than 87.10% of the companies listed in the same industry.
PDD is valuated cheaply when we compare the Price/Earnings ratio to 26.25, which is the current average of the S&P500 Index.
PDD is valuated cheaply with a Price/Forward Earnings ratio of 6.38.
Based on the Price/Forward Earnings ratio, PDD is valued cheaper than 90.32% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.15. PDD is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.48 | ||
| Fwd PE | 6.38 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PDD indicates a rather cheap valuation: PDD is cheaper than 90.32% of the companies listed in the same industry.
80.65% of the companies in the same industry are more expensive than PDD, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.14 | ||
| EV/EBITDA | 3.63 |
4.3 Compensation for Growth
PDD's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 15.20% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.15
PEG (5Y)N/A
EPS Next 2Y14.63%
EPS Next 3Y15.2%
5. Dividend
5.1 Amount
No dividends for PDD!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
96.51
-1.78 (-1.81%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryBroadline Retail
Earnings (Last)
Earnings (Next)
Inst Owners31.47%
Inst Owner Change20.3%
Ins Owners0%
Ins Owner ChangeN/A
Market Cap137.01B
Analysts80.91
Price Target157.33 (63.02%)
Short Float %7.58%
Short Ratio2.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.14%
Min EPS beat(2)-6.97%
Max EPS beat(2)0.7%
EPS beat(4)3
Avg EPS beat(4)28.92%
Min EPS beat(4)-6.97%
Max EPS beat(4)103.72%
EPS beat(8)7
Avg EPS beat(8)40.12%
EPS beat(12)10
Avg EPS beat(12)53.94%
EPS beat(16)14
Avg EPS beat(16)157.46%
Revenue beat(2)0
Avg Revenue beat(2)-4.62%
Min Revenue beat(2)-5.08%
Max Revenue beat(2)-4.17%
Revenue beat(4)1
Avg Revenue beat(4)0.11%
Min Revenue beat(4)-5.08%
Max Revenue beat(4)13.61%
Revenue beat(8)5
Avg Revenue beat(8)8.93%
Revenue beat(12)8
Avg Revenue beat(12)10.58%
Revenue beat(16)9
Avg Revenue beat(16)5.72%
PT rev (1m)-0.17%
PT rev (3m)2.18%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.26%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-3.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-10.97%
Revenue NY rev (1m)-0.29%
Revenue NY rev (3m)-4.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.48 | ||
| Fwd PE | 6.38 | ||
| P/S | 2.5 | ||
| P/FCF | 8.14 | ||
| P/OCF | 8.08 | ||
| P/B | 3.14 | ||
| P/tB | 3.14 | ||
| EV/EBITDA | 3.63 |
EPS(TTM)10.18
EY10.55%
EPS(NY)15.12
Fwd EY15.66%
FCF(TTM)11.85
FCFY12.28%
OCF(TTM)11.95
OCFY12.38%
SpS38.59
BVpS30.7
TBVpS30.7
PEG (NY)1.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.26% | ||
| ROE | 35.89% | ||
| ROCE | 34.24% | ||
| ROIC | 28.81% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 27.53% | ||
| PM (TTM) | 28.55% | ||
| GM | 60.92% | ||
| FCFM | 30.71% |
ROA(3y)17.6%
ROA(5y)10.52%
ROE(3y)31.57%
ROE(5y)18.63%
ROIC(3y)25.13%
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)29.87%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
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%
F-Score7
Asset Turnover0.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.04 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 36.62% | ||
| Cap/Sales | 0.25% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 109.78% | ||
| Profit Quality | 107.59% | ||
| Current Ratio | 2.21 | ||
| Quick Ratio | 2.21 | ||
| Altman-Z | 5.69 |
F-Score7
WACC8.21%
ROIC/WACC3.51
Cap/Depr(3y)32.05%
Cap/Depr(5y)64.52%
Cap/Sales(3y)0.32%
Cap/Sales(5y)0.91%
Profit Quality(3y)138.42%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)21.77%
EPS 3Y106.51%
EPS 5YN/A
EPS Q2Q%-45.82%
EPS Next Y8.24%
EPS Next 2Y14.63%
EPS Next 3Y15.2%
EPS Next 5Y5.36%
Revenue 1Y (TTM)59.04%
Revenue growth 3Y61.24%
Revenue growth 5Y67.2%
Sales Q2Q%9.28%
Revenue Next Year18.82%
Revenue Next 2Y18.57%
Revenue Next 3Y16.95%
Revenue Next 5Y13.52%
EBIT growth 1Y84.71%
EBIT growth 3Y150.51%
EBIT growth 5YN/A
EBIT Next Year8.47%
EBIT Next 3Y18.33%
EBIT Next 5Y4.33%
FCF growth 1Y29.26%
FCF growth 3Y68.03%
FCF growth 5Y52.23%
OCF growth 1Y29.49%
OCF growth 3Y61.8%
OCF growth 5Y52.42%