March 16, 2024 PDD HOLDINGS (PDD)

52 Week Range 59.67 – 152.99
Market Cap 164.4B
Beta (5Y Monthly) 0.66
PE Ratio (TTM) 28.19
EPS (TTM) 4.39
Earnings Date Mar 20, 2024
1y Target Est 171.71

Avg. earning estimate for next year 2024 is 7.33

Stock is down 15.43% down based on Friday March 15 close at $123.74

Investors will be eagerly watching for the performance of PDD Holdings Inc. in its upcoming earnings disclosure. The company’s earnings report is set to be unveiled on March 20, 2024. It is anticipated that the company will report an EPS of $1.62, marking a 33.88% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $11.99 billion, indicating a 107.61% increase compared to the same quarter of the previous year.

March 11, 2024 – Goldman Sachs has revised its stance on PDD Holdings (PDD) from Buy to Neutral, reducing its price target to $136 from $196 due to a shift in the risk-reward balance arising from policy and competitive landscapes. Concerns are driven by the changing policy environment for cross-border businesses, specifically the recent U.S. H.R.7521 bill, and an escalating competitive scene in the Chinese domestic eCommerce market.

Alibaba’s focus on growth for 2024, which aims to stimulate Gross Merchandise Value growth in an online e-commerce market expected to expand by 7% this year, has contributed to this intensified competition.

Goldman Sachs anticipates a heightening competitive situation in China that may result in a slowdown in the expansion rate for PDD’s domestic operations. As such, revenue forecasts for PDD for 2024 and 2025 have been cut by 3%, with earnings estimates lowered between 7% and 10%.

In the context of the revised growth outlook, Goldman Sachs has shifted its valuation methodology for PDD from Discounted Cash Flow (DCF) to Sum of the Parts (SOTP), also adjusting the valuation of PDD’s non-US business, Temu, to reflect market concerns over policy shifts affecting cross-border businesses.

The firm expects caution in short to medium-term investor sentiment towards PDD. While there is a potential 23% upside to the new base case valuation, there’s also an 18% downside to the revised bear case valuation of $90. Since its addition to the Goldman Sachs’ Buy List in August last year, PDD’s stock has risen by 18%, outpacing the MSCI China, KWEB, and Nasdaq indices.