There is no way Pinduoduo Inc. (PDD) can keep these numbers up

Pinduoduo Inc. (NASDAQ: PDD) stock jumped 1.06% on Tuesday to $96.31 against a previous-day closing price of $95.30. With 3.3 million shares changed hands, the volume of the stock remained lighter than its average volume of 12.63 million shares. During the session, the Internet Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $96.44 whereas the lowest price it dropped to was $93.87. The 52-week range on PDD shows that it touched its highest point at $99.30 and its lowest point at $23.21 during that stretch. It currently has a 1-year price target of $103.40. Beta for the stock currently stands at 0.71.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PDD was up-trending over the past week, with a rise of 1.54%, but this was up by 12.08% over a month. Three-month performance surged to 63.32% while six-month performance rose 71.34%. The stock gained 54.32% in the past year, while it has gained 18.10% so far this year. A look at the trailing 12-month EPS for PDD yields 2.96 with Next year EPS estimates of 4.43. For the next quarter, that number is 1.21. This implies an EPS growth rate of 190.30% for this year and 12.20% for next year. EPS is expected to grow by 66.83% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 83.30%.


Float and Shares Shorts:

At present, 1.26 billion PDD shares are outstanding with a float of 908.91 million shares on hand for trading. On Oct 13, 2022, short shares totaled 18.42 million, which was 1.46% higher than short shares on Sep 14, 2022. In addition to Mr. Lei Chen as the firm’s Chairman & CEO, Ms. Jun Liu serves as its VP of Fin.

Institutional Ownership:

Through their ownership of 24.16% of PDD’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 12.40% of PDD, in contrast to 11.30% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in PDD with 2.23% of the stake, Baillie Gifford & Co. holds 28,210,841 shares worth 28,210,841. A second-largest stockholder of PDD, Fidelity Management & Research Co, holds 16,325,191 shares, controlling over 1.29% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in PDD, holding 14,917,233 shares or 1.18% stake. With a 0.51% stake in PDD, the Invesco Developing Markets Fund is the largest stakeholder. A total of 6,378,929 shares are owned by the mutual fund manager. The Invesco QQQ Trust, which owns about 0.49% of PDD stock, is the second-largest Mutual Fund holder. It holds 6,230,531 shares valued at 508.1 million. Government Pension Fund – Global holds 0.43% of the stake in PDD, owning 5,491,589 shares worth 447.84 million.


Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PDD since 52 analysts follow the stock currently. There are 41 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 8 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PDD analysts setting a high price target of $986.78 and a low target of $520.17, the average target price over the next 12 months is $749.67. Based on these targets, PDD could surge 924.59% to reach the target high and rise by 440.1% to reach the target low. Reaching the average price target will result in a growth of 678.39% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PDD will report FY 2022 earnings on 03/18/2024. Analysts have provided yearly estimates in a range of $32.91 being high and $15.77 being low. For PDD, this leads to a yearly average estimate of $25.88. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Pinduoduo Inc. surprised analysts by $0.52 when it reported $1.20 EPS against a consensus estimate of $0.68. The surprise factor in the prior quarter was $0.66. Based on analyst estimates, the high estimate for the next quarter is $14.64 and the low estimate is $5.74. The average estimate for the next quarter is thus $8.47.

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