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Pinduoduo Inc. Sponsored ADR (PDD) Gains But Lags Market: What You Should Know

This story originally appeared on Zacks

In the latest trading session, Pinduoduo Inc. Sponsored ADR (PDD) closed at $92.39, marking a +0.12% move from the previous day. This move lagged the S&P 500’s daily gain of 0.65%.

– Zacks

Coming into today, shares of the company had gained 5.56% in the past month. In that same time, the Retail-Wholesale sector gained 4.83%, while the S&P 500 gained 6.38%.

Wall Street will be looking for positivity from PDD as it approaches its next earnings report date. The company is expected to report EPS of $0.15, up 250% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.01 billion, up 91.63% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.67 per share and revenue of $16.39 billion. These totals would mark changes of +172.83% and +85.98%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for PDD. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PDD is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that PDD has a Forward P/E ratio of 137.73 right now. This represents a premium compared to its industry’s average Forward P/E of 58.49.

The Internet – Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 180, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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