PDD Holdings (NASDAQ:PDD), the operator of the popular shopping app Temu, delivered robust numbers for the first quarter. The Chinese eCommerce major’s top line soared by a whopping 131% year-over-year to $12.02 billion, outpacing expectations by a wide margin of $1.52 billion. Consequently, PDD’s shares are flying nearly 9% higher today.
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The surge in the company’s top line also helped it comfortably beat bottom-line estimates by $1.38. At $2.83, its Earnings per American Depository Share (EPADS) clocked a nearly 194% year-over-year jump.
PDD’s Blockbuster Q1
This performance was primarily driven by growth in PDD’s online marketing and transaction services. Revenue from online marketing rose by 56% to $5.88 billion. Revenue from its transaction services grew at an even more rapid clip, by 327% to $6.14 billion.
While PDD’s cost of sales and operating expenses rose by 194% and 44% respectively, the company managed to expand its net income by 246% to $3.88 billion. Importantly, PDD had a cash pile of $33.5 billion at the end of Q1. This points to robust cash flow generation at the shopping giant.
Moreover, the Q1 results point to PDD’s strong performance in its domestic Chinese market as well as rapid gains from its shopping app Temu in international markets. Within just 20 months of its introduction in the U.S., Temu has clocked rapid market share gains owing to its dirt-cheap product offerings.
What Is the Stock Price Prediction for PDD?
PDD’s stock price has rallied by nearly 131% over the past year. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average PDD price target of $182.78. However, analysts’ views on PDD could see changes following today’s blockbuster earnings report.
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