Shares of PDD Holdings (NASDAQ:PDD) are up in today’s trading as Goldman Sachs upgraded the e-commerce giant’s stock from Hold to Buy after a 131% year-over-year revenue surge in the first quarter. Goldman Sachs also raised its price target for PDD from $145 to $184. Analysts Ronald Keung and David Ma increased their short-term online marketing revenue growth and 2024-26 profit estimates by 25-43% due to strong advertising revenue and improved “Temu unit economics.”
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Despite triple-digit growth rates, PPD only trades at a price-to-earnings ratio of 20.3x. This is likely attributable to the fact that it’s a Chinese stock, which always carries the risk of unfavorable government intervention. As a result, Keung believes that this lack of investor appetite is preventing PDD from being valued at its full business potential.
Is PDD Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on PDD stock based on five Buys assigned in the past three months, as indicated by the graphic below. After a 163% rally in its share price over the past year, the average PDD price target of $223.34 per share implies 41.42% upside potential.
