Pinduoduo Stock Jumps 17% on Strong Q2 Earnings

PDD Holdings (NASDAQ:PDD) shares surged more than 6% in pre-market today after the company reported fiscal Q1 earnings and revenue that exceeded analyst expectations.

The Chinese online retailer announced quarterly earnings per share (EPS) of RMB20.72, well above the Street estimate of RMB10.35. The quarter's revenue was RMB86.81 billion, surpassing the consensus projection of RMB75.17 billion.

Revenue from online marketing services and others reached RMB42.46 billion, exceeding the expected RMB37.65 billion. Transaction services revenue amounted to RMB44.36 billion, higher than the estimated RMB38.07 billion.

Chairman and co-CEO Lei Chen emphasized the company's dedication to providing a reliable shopping experience for global users and its focus on long-term growth through investments that benefit communities sustainably.

Morgan Stanley analysts maintained their Overweight rating on Pinduoduo (NASDAQ:PDD) with a $181 price target, ahead of Q4/23 results due on March 20. As a consequence, the company’s shares gained more than 4% intra-day today.

The focus is on Pinduoduo's online marketing services (OMS) revenue, expected to grow 47% year-over-year, suggesting robust performance amid weak consumer spending.

Despite potential gains from the overseas platform, Temu, recent negative news and legislative scrutiny in the U.S. could pose challenges. The analysts presented three scenarios for Q4 outcomes and their stock implications: Scenario 1 (base case) expects 45-50% OMS growth with a 0-5% stock price increase; Scenario 2 is more optimistic with over 50% growth, potentially lifting the stock 5-15%; Scenario 3, less than 45% growth, could lead to a >10% price drop.

Shares of PDD Holdings (NASDAQ:PDD), formerly known as Pinduoduo, saw a significant increase of nearly 15% pre-market today following the announcement of their third-quarter sales, which exceeded expectations.

For the quarter ending September 30, PDD reported a revenue of 68.84 billion yuan (approximately $9.44 billion), surpassing the Street estimate of 54.87 billion yuan. The company's adjusted earnings per American depositary receipt were 11.61 yuan (around $1.55), also exceeding the forecasted 8.81 yuan.

This financial success is partly attributed to the rising popularity of PDD's Temu e-commerce application, launched in 2022. Temu, known for offering significantly discounted products shipped directly from China, has gained substantial traction.

Pinduoduo (NASDAQ:PDD) shares jumped more than 17% intra-day today following the company's remarkable performance in the second quarter, which greatly exceeded expectations.

During the quarter, Pinduoduo reported an EPS of 10.47 yuan per share, surpassing the Street projection by 3.17 yuan. Furthermore, the company's revenue for the quarter totaled 52.28 billion yuan, significantly outpacing the Street estimate of 43.36 billion yuan.

PDD's earnings from online marketing services and other sources reached 37.93 billion yuan, surpassing the expected 32.07 billion yuan. Additionally, the revenue generated from transaction services amounted to 14.35 billion yuan, exceeding the consensus forecast of 11.14 billion yuan.