PDD Holdings: Q4 Earnings Miss, But The Stock Is Cheap
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Jonathan WeberInvesting GroupFollow5ShareSavePlay(8min)CommentsSummaryPDD Holdings posted a double miss on earnings and revenue, yet valuation remains undemanding at a 9x forward P/E.Revenue grew 12% year-over-year, led by 19% growth in transaction services, but margin compression resulted in declining EPS.Management is investing heavily in supply chain and marketing, pressuring margins now but potentially setting up future growth acceleration.I maintain a neutral/hold rating on PDD due to solid growth, margin risks, and China/geopolitical exposure, balanced by a low valuation.Looking for a helping hand in the market? Members of Cash Flow Club get exclusive ideas and guidance to navigate any climate. Learn More » Robert Way/iStock Editorial via Getty Images Article Thesis PDD Holdings Inc. (PDD) reported its most recent earnings results on Wednesday. The company missed the consensus estimate on both lines, but I think that the valuation is so undemanding that thisThis article was written byJonathan Weber53.83K FollowersFollowJonathan Weber holds an engineering degree and has been active in the stock market and as a freelance analyst for many years. He has been sharing his research on Seeking Alpha since 2014. Jonathan’s primary focus is on value and income stocks but he covers growth occasionally. He is a contributing author for the investing group Cash Flow Club where along with Darren McCammon, they focus on company cash flows and their access to capital. Core features include: access to the leader’s personal income portfolio targeting 6%+ yield, community chat, the “Best Opportunities” List, coverage of energy midstream, commercial mREITs, BDCs, and shipping sectors,, and transparency on performance. Learn More.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.