Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com - Barclays raised its price target on Pinduoduo Inc. (NASDAQ:PDD) to $165.00 from $158.00 on Monday, while maintaining an Overweight rating on the Chinese e-commerce company. The company maintains an "EXCELLENT" financial health score according to InvestingPro data, with robust fundamentals supporting its growth trajectory.
The price target increase comes despite decelerating growth in Pinduoduo’s China business, which saw online marketing segment revenue growth slow to 13.4% year-over-year in the second quarter, in line with Barclays’ expectations.
Gross margin in Q2 fell below estimates, dropping 940 basis points year-over-year and 130 basis points quarter-over-quarter, which Barclays attributes to Pinduoduo’s 100 billion RMB merchant support program that includes increased fulfillment and logistics support to merchants and lower platform service charges. Despite the recent decline, the company maintains impressive gross profit margins of 59.73%. InvestingPro subscribers can access 8 additional key insights about PDD’s financial performance and valuation metrics.
Operating expenses came in well below Barclays’ estimates, more than offsetting lower-than-expected gross profits, which the firm views as demonstrating Pinduoduo’s "executional and operational prowess."
Barclays estimates that Pinduoduo’s international shopping platform Temu saw approximately 40% year-over-year GMV growth in Q2, while Temu’s sales and marketing expenses remained relatively flat year-over-year due to limited marketing spend in the U.S. during the quarter. This growth complements PDD’s overall revenue increase of 35.67% over the last twelve months, while maintaining an attractive P/E ratio of 11.96. Discover comprehensive analysis and more metrics with InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Pinduoduo Inc. reported strong second-quarter 2025 earnings, with an earnings per share (EPS) of 22.07, significantly surpassing the forecasted 14.8. The company’s revenue also exceeded expectations, reaching 103.98 billion RMB compared to the projected 103.2 billion RMB. Following these results, Jefferies raised its price target for Pinduoduo to $146, maintaining a Buy rating due to high-quality growth driven by lower-than-expected sales and marketing expenses. Similarly, US Tiger Securities increased its price target to $120 from $100, although it maintained a Hold rating, attributing the improved profit performance to reduced operating expenses rather than fundamental business strength. Despite the positive earnings report, Pinduoduo’s stock experienced a pre-market decline, indicating investor concerns about profitability fluctuations and market competition. These developments highlight the mixed reactions from analysts and investors regarding Pinduoduo’s recent financial performance.
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