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Investing.com - Benchmark raised its price target on Pinduoduo Inc. (NASDAQ:PDD) to $160 from $128 while maintaining a Buy rating on Tuesday. The stock has shown strong momentum with a 32% year-to-date return, according to InvestingPro data.
The Chinese e-commerce company reported second-quarter results that showed moderate revenue growth of 19.92%, with slowing domestic performance and muted international operations amid an ongoing business model transition in a challenging global trade environment. The company maintains robust financials with a healthy current ratio of 2.36x and more cash than debt on its balance sheet.
Despite the revenue challenges, Pinduoduo’s profitability significantly exceeded analyst expectations, with net income reaching $13.67 billion in the last twelve months, demonstrating what Benchmark described as a more disciplined balance between growth initiatives and spending controls than initially anticipated. InvestingPro analysis shows the company maintains an EXCELLENT financial health score, with 8 additional exclusive insights available to subscribers.
The company’s differentiated group-buying business model has strengthened its market position following the exit of key competitors, according to Benchmark’s analysis, which contributed to the firm’s decision to raise earnings forecasts.
Benchmark noted that uncertainties remain regarding Pinduoduo’s normalized growth trajectory, margin outlook after merchant support programs conclude, and the resolution of trade and tariff issues, which could drive continued stock volatility in upcoming quarters.
In other recent news, Pinduoduo Inc. reported second-quarter earnings that surpassed market expectations, with adjusted net profit exceeding forecasts by 46%. The company’s revenue met consensus estimates, while marketing revenue grew by 13% year-over-year. Analysts from BofA Securities, HSBC, Macquarie, Barclays, and Jefferies have all raised their price targets for Pinduoduo following these strong results. BofA Securities increased its target to $141, maintaining a Neutral rating, while HSBC raised its target to $155 with a Buy rating, highlighting resilient transaction service revenue and lower-than-expected sales and marketing expenses. Macquarie raised its target to $165, citing strong profit results and reduced marketing expenses. Barclays also set its target at $165, noting growth in Pinduoduo’s international platform Temu despite slower growth in its China business. Jefferies increased its target to $146, attributing the rise to high-quality growth and lower sales and marketing expenses. These developments reflect a positive outlook among analysts for Pinduoduo’s financial performance.
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