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Investing.com - BofA Securities has lowered its price target on Pinduoduo Inc. (NASDAQ:PDD) to $140.00 from $141.00 while maintaining a Neutral rating following the company’s third-quarter earnings report. According to InvestingPro data, PDD appears undervalued with a Fair Value significantly above its current price of $119.58, despite the stock’s 23.3% year-to-date gain.
The e-commerce platform delivered a strong profit beat in the third quarter, exceeding consensus estimates by 25%, driven by a rebound in adjusted operating growth of 1% year-over-year compared to a 28% decline in the first half of 2025. This performance aligns with PDD’s impressive financial health, rated as "GREAT" by InvestingPro, which highlights the company’s strong profit score of 4.59 out of 5.
Despite the profit improvement, BofA noted a concerning slowdown in online marketing services (OMS) revenue, which grew only 8% year-over-year this quarter versus 13% in the second quarter of 2025, marking Pinduoduo’s first single-digit growth in this segment.
The analyst attributed the slowdown primarily to a declined marketing take rate resulting from continued ecosystem investments, including contra revenue merchant rebates, while modeling domestic gross merchandise value (GMV) growth of 13.8% year-over-year for the third quarter.
Looking ahead, BofA acknowledged that OMS growth will inevitably moderate as Pinduoduo surpasses 5 trillion RMB in GMV, with deceleration compounded by sluggish industry growth and management guidance pointing to intensifying competitive dynamics.
In other recent news, PDD Holdings Inc. reported its Q3 2025 earnings, which fell short of analyst expectations. The company posted an earnings per share (EPS) of 21.08, missing the anticipated 23.5, while its revenue reached 108.3 billion RMB, below the forecasted 145.2 billion RMB. These results have raised concerns among investors about PDD Holdings’ financial performance. Additionally, Bernstein SocGen Group downgraded Pinduoduo Inc.’s stock rating from Outperform to Market Perform. The downgrade was attributed to the maturing of Pinduoduo’s domestic business, with analysts noting stagnant growth in daily active users and time spent on the platform. Bernstein SocGen also lowered its price target for the company to $135.00 from $140.00. Analyst Robin Zhu suggested that Pinduoduo should focus on engaging with investors and returning cash as part of its strategic adjustments. These developments highlight recent challenges faced by PDD Holdings and its subsidiary, Pinduoduo.
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