PDD Holdings Inc. Fundamental Analysis
PDD Holdings Inc. (PDD) shows strong financial fundamentals with a PE ratio of 8.57, profit margin of 21.63%, and ROE of 24.04%. The company generates $441.8B in annual revenue with moderate year-over-year growth of 9.65%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 89.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze PDD's fundamental strength across five key dimensions:
Efficiency Score
ExcellentPDD demonstrates superior asset utilization.
Valuation Score
ExcellentPDD trades at attractive valuation levels.
Growth Score
ModeratePDD shows steady but slowing expansion.
Financial Health Score
ExcellentPDD maintains a strong and stable balance sheet.
Profitability Score
ExcellentPDD achieves industry-leading margins.
Key Financial Metrics
Is PDD Expensive or Cheap?
P/E Ratio
PDD trades at 8.57 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, PDD's PEG of -0.41 indicates potential undervaluation.
Price to Book
The market values PDD Holdings Inc. at 1.94 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.54 times EBITDA. This is generally considered low.
How Well Does PDD Make Money?
Net Profit Margin
For every $100 in sales, PDD Holdings Inc. keeps $21.63 as profit after all expenses.
Operating Margin
Core operations generate 22.19 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $24.04 in profit for every $100 of shareholder equity.
ROA
PDD Holdings Inc. generates $15.04 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
PDD Holdings Inc. produces operating cash flow of $106.94B, showing steady but balanced cash generation.
Free Cash Flow
PDD Holdings Inc. generates strong free cash flow of $106.94B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $76.17 in free cash annually.
FCF Yield
PDD converts 13.06% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.57
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.41
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.94
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.85
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.01
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.54
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.24
vs 25 benchmark
ROA
Return on assets percentage
0.15
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How PDD Stacks Against Its Sector Peers
| Metric | PDD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.57 | 24.20 | Better (Cheaper) |
| ROE | 24.04% | 1170.00% | Weak |
| Net Margin | 21.63% | 2530.00% | Weak |
| Debt/Equity | 0.01 | 0.72 | Strong (Low Leverage) |
| Current Ratio | 2.54 | 2.82 | Strong Liquidity |
| ROA | 15.04% | -8380.00% (disorted) | Strong |
PDD outperforms its industry in 4 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews PDD Holdings Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
517.33%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
1258.96%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
222.54%
Industry Style: Cyclical, Growth, Discretionary
High Growth