PDD (PDD) versus Its Competitors Critical Analysis

PDD (NASDAQ:PDD) is one of 142 publicly-traded companies in the “Broadline Retail” industry, but how does it contrast to its peers? We will compare PDD to similar businesses based on the strength of its valuation, dividends, risk, earnings, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares PDD and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PDD	20.73%	22.29%	14.68%
PDD Competitors	-2.60%	-19.44%	-2.10%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for PDD and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDD	2	9	5	0	2.19
PDD Competitors	1411	5418	10909	311	2.56

PDD presently has a consensus target price of $107.31, indicating a potential upside of 37.66%. As a group, “Broadline Retail” companies have a potential upside of 18.75%. Given PDD’s higher possible upside, research analysts clearly believe PDD is more favorable than its peers.

Institutional & Insider Ownership

39.8% of PDD shares are held by institutional investors. Comparatively, 44.5% of shares of all “Broadline Retail” companies are held by institutional investors. 3.7% of PDD shares are held by company insiders. Comparatively, 23.6% of shares of all “Broadline Retail” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

PDD has a beta of -0.03, suggesting that its share price is 103% less volatile than the S&P 500. Comparatively, PDD’s peers have a beta of 1.74, suggesting that their average share price is 74% more volatile than the S&P 500.

Valuation and Earnings

This table compares PDD and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
PDD	$61.75 billion	$13.99 billion	8.58
PDD Competitors	$22.27 billion	$1.71 billion	14.55

PDD has higher revenue and earnings than its peers. PDD is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

PDD peers beat PDD on 7 of the 13 factors compared.

About PDD

PDD Holdings Inc. operates e-commerce platforms that connect consumers with merchants and other suppliers. Its businesses include Pinduoduo, a marketplace focused on China, and Temu, an international online marketplace. Pinduoduo uses interactive shopping features, including group buying, and offers products across categories such as groceries, apparel, home goods and electronics. The platform has also emphasized agricultural products, connecting farmers with consumers and other buyers. Temu serves customers in multiple markets outside China and offers a wide range of merchandise from suppliers and brands.