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Investing.com - Benchmark maintained its Buy rating and $160.00 price target on Pinduoduo Inc. (NASDAQ:PDD) following the company’s third-quarter results that were largely in line with expectations. This aligns with the broader analyst consensus of 1.73 (Strong Buy), with price targets ranging from $119.94 to $198.22. According to InvestingPro data, PDD currently appears undervalued based on Fair Value calculations.
The Chinese e-commerce giant reported moderate revenue growth supported by domestic ecosystem investments and a healthy quarter-over-quarter increase in Temu’s international business, according to Benchmark. PDD’s revenue reached $58.79 billion over the last twelve months, with a growth rate of 12.48%.
Pinduoduo’s profitability reflected expected fluctuations as the company executed strategic initiatives, including its RMB 100 billion merchant support program and targeted platform upgrades, while maintaining focus on long-term ecosystem building. InvestingPro data shows PDD maintains a strong financial position with more cash than debt and a current ratio of 2.36, providing flexibility for these investments.
Temu’s growth is increasingly diversified beyond the United States, with Europe emerging as a key driver for the international business segment, prompting Benchmark to modestly raise its FY25/FY26 revenue forecasts while keeping earnings estimates largely unchanged. Analysts forecast EPS of $10.88 for fiscal year 2025, reflecting continued strong performance.
Near-term uncertainties remain for Pinduoduo, particularly around domestic growth normalization, margin volatility from ongoing investments, and evolving global regulations, though Benchmark believes the company’s structural advantages and strategic initiatives should support healthy long-term earnings potential. Despite these challenges, PDD maintains impressive profitability metrics with a gross profit margin of 56.65% and return on equity of 31%. InvestingPro offers additional insights through its comprehensive Pro Research Report, available for Pinduoduo and 1,400+ other top US equities.
In other recent news, Pinduoduo Inc. reported its third-quarter earnings, revealing a shortfall in both earnings per share (EPS) and revenue compared to forecasts. The company posted an EPS of 21.08, missing the expected 23.5, and reported revenue of 108.3 billion RMB, falling short of the anticipated 145.2 billion RMB. Despite this, the company delivered a strong profit beat, exceeding consensus estimates by 25%, driven by a rebound in adjusted operating growth of 1% year-over-year. BofA Securities responded to the earnings report by lowering its price target for Pinduoduo to $140 while maintaining a Neutral rating. Meanwhile, Bernstein SocGen Group downgraded Pinduoduo’s stock from Outperform to Market Perform, citing concerns over the maturing domestic business and non-growth in daily active users. Analyst Robin Zhu from Bernstein SocGen suggested that Pinduoduo should focus on engaging with investors and consider returning cash. These developments highlight the mixed reactions from analysts regarding Pinduoduo’s recent performance and future prospects.
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