PDD Holdings Inc (PDD, Financial), a multinational commerce group operating in the cyclical retail industry, has seen a significant surge in its stock price over the past three months. The company's stock price has increased by 31.50% over the past quarter, despite a 3.63% decrease over the past week. The current stock price stands at $95.89, with a market cap of $127.4 billion. According to GuruFocus.com's GF Value, which calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates, the stock is modestly undervalued with a GF Value of $119.71. This is a significant change from three months ago when the GF Value was $136.13, suggesting that the stock was significantly undervalued.
Company Overview
PDD Holdings (Nasdaq: PDD) is a multinational commerce group that owns and operates a portfolio of businesses. The company aims to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfilment capabilities, that support its underlying businesses.
Profitability Analysis
According to GuruFocus.com's Profitability Rank, PDD Holdings has a rank of 4/10, indicating moderate profitability. The company's Operating Margin stands at 23.69%, better than 96.41% of the companies in the same industry. The ROE is 34.78%, ROA is 17.72%, and ROIC is 68.44%, all of which are better than the majority of the companies in the industry. Over the past 10 years, the company has had 2 years of profitability, better than 8.99% of the companies in the industry.
Growth Prospects
PDD Holdings has a Growth Rank of 7/10, indicating strong growth potential. The company's 3-Year Revenue Growth Rate per Share is 51.80%, and its 5-Year Revenue Growth Rate per Share is 96.40%, both of which are better than the majority of the companies in the industry. The company's future 3 to 5-year total revenue growth rate estimate is 38.94%, and its EPS without NRI growth rate estimate for the next 3 to 5 years is 21.35%, both of which are better than the majority of the companies in the industry.
Top Holders
The top three holders of PDD Holdings' stock are Baillie Gifford (Trades, Portfolio) with 2.35% of shares, Ray Dalio (Trades, Portfolio) with 0.21% of shares, and Ken Fisher (Trades, Portfolio) with 0.14% of shares.
Competitive Landscape
PDD Holdings operates in a competitive industry with major players such as Sea Ltd (SE, Financial) with a market cap of $20.47 billion, MercadoLibre Inc (MELI, Financial) with a market cap of $64.78 billion, and eBay Inc (EBAY, Financial) with a market cap of $23.58 billion.
Conclusion
In conclusion, PDD Holdings Inc has shown strong performance over the past three months with a 31.50% increase in its stock price. The company's profitability and growth ranks, along with its key profitability and growth metrics, suggest that it has a strong potential for future growth. Despite the competitive landscape, PDD Holdings' focus on the digital economy and support for local communities and small businesses may provide it with a competitive edge in the industry.
