Bitcoin price today: rises to $111.5k, altcoins lag ahead of payrolls test
On Monday, Morgan Stanley (NYSE:MS) reiterated its Overweight rating on Pinduoduo Inc. (NASDAQ:PDD) stock, maintaining a price target of $150.00. Currently trading at $119.24, InvestingPro analysis suggests the stock is undervalued, with analysts’ targets ranging from $106.84 to $194.72. The firm anticipates that the upcoming release of Pinduoduo’s first-quarter 2025 financial results could act as a catalyst for the company’s share price. Pinduoduo is expected to unveil its financials on Tuesday, May 27, 2025.
According to Morgan Stanley, Pinduoduo’s online marketing services (OMS) revenue is projected to grow by 11% year-over-year in the first quarter, reflecting an 18% increase in gross merchandise volume (GMV). This follows the company’s impressive 59.04% revenue growth over the last twelve months, with an industry-leading gross profit margin of 60.92%. This growth rate is significantly higher than the industry’s average of 6% YoY, suggesting that Pinduoduo is continuing to expand its market share. Despite this growth, OMS revenue is expected to increase at a slower rate than GMV due to the company’s strategy of providing more support and subsidies to merchants, which may lead to a reduced take rate.
The firm has also forecasted that Pinduoduo’s non-GAAP net profit for the first quarter will reach RMB 28 billion, a decrease of 8% YoY. This decline is attributed to a high earnings base from the first quarter of 2024, along with increased subsidies to merchants and consumers. However, this might be partially balanced by reduced spending in Pinduoduo’s US operations under the Temu brand.
Morgan Stanley outlined three potential scenarios for Pinduoduo’s first-quarter performance. The base case scenario, which the firm believes has a 60% probability, includes OMS revenue growth of 11-14% YoY and a non-GAAP net profit of RMB 27-28 billion. In this scenario, Pinduoduo’s share price is expected to rise between 0-5%. A more optimistic outcome would see OMS revenue growth of 15-20% YoY and non-GAAP net profit of RMB 29-30 billion, potentially leading to a 5-15% increase in the share price. Conversely, if OMS revenue growth falls below 10% YoY and non-GAAP net profit drops below RMB 25 billion, the share price could decrease by more than 10%. InvestingPro data shows the company maintains excellent financial health with an overall score of 4.0/5, supported by strong profitability metrics and a conservative P/E ratio of 10.61.
The firm’s focus remains on the anticipated financial report release on May 27, which could provide the next significant momentum for Pinduoduo’s stock performance.
In other recent news, Pinduoduo Inc. received an upgrade from Citi, with analyst Alicia Yap raising the stock rating from Neutral to Buy and increasing the price target to $165. This decision was influenced by tariff reductions expected to benefit cross-border sales, particularly through Temu in the United States. Yap highlighted that Pinduoduo’s shift to a semi-managed business model and recent pricing changes might help manage tariff impacts. Meanwhile, PDD Holdings, the parent company of Pinduoduo, is transitioning Temu to a local U.S. merchant model to mitigate tariff effects and maintain competitive pricing. This strategic pivot aligns with the challenges faced by similar platforms due to increased import taxes. Additionally, Chinese authorities have mandated that platforms like PDD Holdings discontinue no-return refunds to alleviate merchant financial pressures. This regulatory change will require merchants to initiate refunds, potentially impacting operational practices. PDD Holdings has not commented on this development, which reflects ongoing adjustments in the e-commerce landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.