Shares of PDD Holdings (NASDAQ: PDD) were popping today after the Chinese e-commerce giant posted another round of blistering growth in its fourth-quarter earnings report. Revenue and operating profit both more than doubled in the period.
As of 9:45 a.m., the stock was up 6% after opening up as much as 16% higher.
PDD is destroying the competition
PDD, the parent of Pinduoduo and Temu, the fast-growing international discount e-commerce platform, blew past estimates in its fourth-quarter earnings report.
Revenue jumped 123% to $12.5 billion, which easily beat the analyst consensus at $11.14 billion. Adjusted operating income rose 112% to $3.46 billion, showing the company is also delivering strong margins as it’s gaining leverage on its earlier investments in marketing and other overhead expenses.
On the bottom line, adjusted earnings per share jumped 108% to $2.40, which also crushed expectations of $1.61.
Co-CEO Jiazhen Zhao said, “We will continue our high-quality development strategy, stay dedicated to [offering] great value and exceptional service and keep building thriving communities that can benefit all.”
What’s next for PDD
PDD’s stunning growth comes at a time when rivals like Alibaba and JD.com are struggling, experiencing barely any revenue growth. While the Chinese consumer has been weak, Pinduoduo is still taking market share in China from its competitors thanks to aggressive discounting and a social commerce model in which customers bundle orders with friends and family. Temu, meanwhile, has grown like wildfire abroad and is challenging fellow Chinese discount platform Shein.
The company did not offer guidance, but it continues to look like the best bet in the Chinese tech sector, as it has easily overcome the challenges that have upended its rivals.
Should you invest $1,000 in PDD Holdings right now?
Before you buy stock in PDD Holdings, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PDD Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 18, 2024
Jeremy Bowman has positions in JD.com. The Motley Fool has positions in and recommends JD.com. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
Why PDD Holdings Stock Was Climbing Today was originally published by The Motley Fool