PDD (NASDAQ:PDD) Posts Quarterly Earnings Results, Beats Expectations By $0.11 EPS

PDD (NASDAQ:PDD) announced its quarterly earnings results on Monday. The company reported $2.84 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.73 by $0.11, FiscalAI reports. PDD had a net margin of 21.86% and a return on equity of 24.32%. The firm had revenue of $16.54 billion for the quarter, compared to the consensus estimate of $16.94 billion. During the same period in the prior year, the firm posted $22.07 earnings per share. The firm’s quarterly revenue was up 8.1% compared to the same quarter last year.

Here are the key takeaways from PDD’s conference call:

• Profitability declined as Q2 revenue rose 8% year over year to RMB 112.4 billion, while net income fell 12% to RMB 27.2 billion and non-GAAP operating margin narrowed to 26% from 27%.
• Despite near-term earnings pressure, operating cash flow increased to RMB 25.7 billion from RMB 21.6 billion, and the company held RMB 456.4 billion in cash equivalents and short-term investments at quarter-end.
• Management is accelerating long-term investment in platform governance, supply chains, rural delivery infrastructure, and merchant support; however, higher R&D and ecosystem spending contributed to the near-term margin decline.
• New EU customs duties are expected to reduce fulfillment efficiency and increase costs for affected cross-border orders in the short term, creating a meaningful headwind for overseas growth.
• The first-party brand rollout is progressing but took longer than expected, with management emphasizing a selective, long-term approach while maintaining an open marketplace where first-party and third-party products coexist.

PDD Stock Up 0.2%

Shares of PDD traded up $0.15 during trading on Monday, reaching $88.53. 5,788,110 shares of the company traded hands, compared to its average volume of 8,052,156. PDD has a twelve month low of $71.94 and a twelve month high of $139.41. The stock has a market cap of $126.01 billion, a PE ratio of 9.56, a price-to-earnings-growth ratio of 0.72 and a beta of 0.02. The stock has a 50-day simple moving average of $84.51 and a 200-day simple moving average of $93.56.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in PDD. Himalaya Capital Management LLC acquired a new position in shares of PDD during the 2nd quarter worth $482,273,000. Dodge & Cox acquired a new position in shares of PDD during the 4th quarter worth $503,429,000. Orbis Allan Gray Ltd grew its stake in shares of PDD by 135.6% during the 2nd quarter. Orbis Allan Gray Ltd now owns 5,647,728 shares of the company’s stock worth $591,091,000 after purchasing an additional 3,250,416 shares during the period. Schroder Investment Management Group grew its stake in shares of PDD by 199.8% during the 4th quarter. Schroder Investment Management Group now owns 4,137,857 shares of the company’s stock worth $469,192,000 after purchasing an additional 2,757,844 shares during the period. Finally, Arrowstreet Capital Limited Partnership acquired a new position in shares of PDD during the 3rd quarter worth $196,638,000. Hedge funds and other institutional investors own 39.83% of the company’s stock.

Wall Street Analyst Weigh In

A number of analysts recently issued reports on PDD shares. BNP Paribas Exane began coverage on shares of PDD in a research report on Monday, June 15th. They set an “underperform” rating and a $89.00 price objective for the company. Morgan Stanley set a $129.00 price objective on shares of PDD in a research report on Wednesday, May 27th. Zacks Research cut shares of PDD from a “hold” rating to a “strong sell” rating in a research report on Monday, July 27th. Citigroup reduced their price objective on shares of PDD from $142.00 to $123.00 and set a “buy” rating for the company in a research report on Wednesday, May 27th. Finally, Sanford C. Bernstein reduced their price objective on shares of PDD from $132.00 to $110.00 and set a “market perform” rating for the company in a research report on Wednesday, May 27th. Seven analysts have rated the stock with a Buy rating, seven have issued a Hold rating and two have assigned a Sell rating to the company’s stock. According to MarketBeat.com, PDD has an average rating of “Hold” and a consensus target price of $124.64.

PDD Company Profile

PDD (NASDAQ: PDD) is the holding company best known for operating Pinduoduo, a China-based, mobile-first e-commerce platform that emphasizes interactive, social shopping and group-buying mechanics to drive user engagement and low prices. Founded in 2015 by entrepreneur Colin Huang, the business has grown by connecting consumers directly with merchants and manufacturers, with particular emphasis on value-oriented goods and fresh agricultural produce. The company is based in Shanghai and completed a U.S.