Goldman Sachs initiates coverage on DiDi Global stock with Buy rating

Investing.com - Goldman Sachs initiated coverage on DiDi Global (OTC:DIDIY) with a Buy rating and a price target of $7.20 on Wednesday. The stock, currently trading at $5.48, has shown remarkable momentum with a nearly 50% return over the past year and is trading near its 52-week high of $5.49.

The investment bank cited DiDi’s strong position to capture growing global mobility opportunities and its leadership in autonomous driving technology as key factors in its positive outlook. InvestingPro data shows the company maintains a "GREAT" overall financial health score, with strong growth and cash flow metrics.

Goldman Sachs highlighted DiDi’s "undemanding valuation" at 14 times 2026 estimated domestic price-to-earnings ratio compared to projected revenue and EPS CAGRs of 8% and 44%, respectively, from 2024 to 2027.

The firm expects sustained growth in DiDi’s domestic profit and free cash flow streams, noting it represents "one of the fastest profit growths" within Goldman’s China Internet coverage universe.

Goldman Sachs also pointed to DiDi’s $25 billion market capitalization (18 times FY26 estimated P/E) versus Uber (NYSE:UBER)’s $200 billion (27 times FY26 estimated P/E) as evidence of an attractive valuation compared to global peers. According to InvestingPro, DiDi’s current PEG ratio of 0.32 suggests the stock may be undervalued relative to its growth prospects.

In other recent news, Didi Global has reported a revenue increase for the first quarter, reaching 53.3 billion yuan, an 8.6% rise from the previous year’s 49.1 billion yuan. The company’s adjusted EBITDA saw a notable growth of 82% year-over-year, totaling 3.1 billion yuan, while the adjusted EBITA rose to 2.4 billion yuan from last year’s 965 million yuan. Didi Global also recorded a new high in average daily transactions, which hit 36.2 million, indicating substantial growth in its China mobility business. Looking ahead, the company has expressed its commitment to advancing autonomous driving and artificial intelligence (AI) technologies. This strategic focus aims to enhance services for drivers, users, and partners, potentially marking a shift in Didi Global’s business approach. The company’s plans also include supporting stable employment and boosting consumption by 2025. These recent developments highlight Didi Global’s ongoing efforts to strengthen its market position and innovate within the industry.

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