PDD is in a cup base with a buy point of 164.69. Shares are just above the 10-week moving average as the base takes shape and the stock goes for a six-day win streak. PDD is today's selection for IBD 50 Stocks To Watch.
Sales and earnings growth accelerated over the past three quarters. In the first quarter, sales of $12 million rose 119% while earnings of $2.87 per share were 185% higher than the prior year. That followed sales gains of 35%, 46%, 54%, 89% and 117% the preceding quarters. EPS rose 28%, 31% and 102% the previous three quarters.
Meanwhile, the stock has been outperforming the IBD database. The Relative Strength Rating stands at 90 and the Composite Rating and EPS Rating are both 99.
The Chinese company, which has incorporated in Ireland, operates Pinduoduo and Temu, which are online platforms and mobile shopping apps. Temu is rapidly growing its presence in the U.S. and other countries, thanks to social media advertising and a Super Bowl commercial. Temu was the top downloaded app in the U.S. last year.
Analysts Still Bullish On PDD Stock
According to IBD MarketSurge, profit estimates for 2024 and 2025 have gone up, providing tailwinds. For 2024, analysts polled by FactSet expect profit to rise 83% to $12 per share. For 2025, analysts' consensus estimate is $15.51 per share, or a 29% increase.
As PDD stock recovers from a June-July decline, institutional investors are buying the stock. Mutual funds own 28% of shares outstanding. High interest from institutional buyers in recent weeks has given the stock an Accumulation/Distribution Rating of B-.
The respected Fidelity Contrafund (FCNTX) holds shares of PDD. ProShares Online Retail ETF holds PDD stock, too.
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