Our Stock of the Week is PDD Holdings, Inc. (PDD). PDD is a leading Chinese e-commerce platform that uses a group-buying model, which allows users to team up to purchase items at discounted prices. The platform integrates social media, which encourages users to share product listings with friends and family so that they can form purchasing groups. PDD is a significant player in the Chinese e-commerce market.
In the second quarter of 2023, PDD reported revenue growth of 54% and EPS growth of 28%, which significantly beat estimates and caused the stock to jump 15%. The stock has been trending higher since then and now has a triple top, which looks ripe for a breakout as it awaits earnings around November 23.
The stock trades with a trailing PE of 22 and is expected to grow earnings 24% in 2024, but it has consistently beat estimates and steadily increased revenues. The current EPS estimate for 2024 is $5.16, which would be an increase of 24% over the prior year.
Analysts like the stock with an average target price of around $125. Goldman Sachs reiterated its buy last week and has a high target of $155.
We are watching for the potential of a breakout in front of what should be another very strong earnings report next week. As usual, we will not chase the stock on Monday but will look to aggressively trade it depending on market conditions and price action.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing no positions in PDD. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
