Latest news with #PDD
Globe and Mail
3 days ago
- Business
- Globe and Mail
Bear of the Day: PDD Holdings (PDD)
PDD Holdings Company Overview Zacks Rank #5 (Strong Sell) stock PDD Holdings ( PDD ), also known as Pinduoduo, is a multinational e-commerce company that operates in China and globally. PDD, which was based originally in Shanghai, enjoys it' largest market in China and operates under the Pinduoduo name. Meanwhile, PDD's US and international businesses operate under the 'Temu' umbrella. PDD has gained a foothold in several international markets by offering competitive and often cheaper prices than competitors such as ( JD ), Alibaba ( BABA ), and Amazon ( AMZN ). In its Chinese market, another key differentiator for PDD Holdings is that it offers a group buying model that allows customers to unlock lower prices by encouraging family and friends also to purchase items. The team purchase model does this through an interactive and social shopping experience. In addition, PDD can often offer lower prices because it removes the middleman and connects users directly with agricultural producers, allowing the company to provide fresh, affordable produce. Beyond its e-commerce platform, PDD has vertically integrated its business with a vast network of sourcing, logistics, and fulfillment capabilities. PDD Earnings Disappoint Last quarter, PDD's net profit plunged nearly 50%, and the company fell short of Zacks Consensus Estimates by an ugly 37%. PDD is suffering amid three major challenges, including: · Tariff Turmoil: PDD was one of the most adversely impacted businesses in the tit-for-tat tariff war between the US and tensions have cooled between the world's two largest economies, the US still has a tariff on China of around 50%, likely making goods from the Temu website far more expensive for Americans. · A Weak Chinese Economy: An ongoing housing crisis, rampant unemployment, and sluggish domestic consumption are all factors causing PDD's Chinese business to suffer. · Intense Competition: The Chinese e-commerce market is highly competitive. Though PDD missed estimates, JD beat estimates in the recent quarter – an ominous sign. PDD Profit Margins Sink PDD is not only suffering from sluggish demand but also weak profit margins. In fact, quarterly margins have been cut in half since 2024. PDD Price Action PDD shares are stuck in a downtrend, exhibiting relative weakness, and are carving out a bear flag chart pattern. Bottom Line Though PDD Holdings has carved out an impressive niche in the global e-commerce landscape, the company faces significant headwinds, including, tariffs, a weak Chinese economy, and intense competition. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN): Free Stock Analysis Report Inc. (JD): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis Report PDD Holdings Inc. Sponsored ADR (PDD): Free Stock Analysis Report This article originally published on Zacks Investment Research (
Business Insider
4 days ago
- Business
- Business Insider
Technical Outlook Favors Tactical Options Strategy on PDD Holdings Stock (PDD)
At first glance, circumstances don't look appealing for PDD Holdings (PDD). A global e-commerce holding company, PDD is, of course, tethered to the health of the Chinese consumer economy. Its two core platforms are Pinduoduo, a social-commerce enterprise, and Temu, a budget online marketplace that brings significantly discounted goods directly from China. However, with the advent of President Donald Trump's trade tariffs, such businesses face extra scrutiny. Confident Investing Starts Here: To be sure, diplomats from both the U.S. and China have finished a first round of negotiations, concluding with a new framework. While details have been modest, the deal includes assurances on the supply of rare-earth minerals and potential tariff easing. At the same time, critics have lashed out, not only due to the lack of specifics but also in the form of skepticism that any meaningful progress has been made. Fundamentally, though, investors should note that the Trump administration likely understands the consequences of acting too aggressively and thus is unlikely to be irrational. It's like the reason why the President tends to walk back hard-hitting policies and rhetoric. Just the fact that this framework has materialized is evidence that the White House isn't really prepared to go toe-to-toe with the Chinese. That's good news for PDD stock from an investment perspective. It might even be better news for bullish options traders like me. Understanding the Architecture of Speculation for PDD Stock For traditional buy-and-hold investors, they often deal with long-term frameworks. When analysts assign price targets, they're usually 12-month forecasts. Such an extended period provides ample flexibility for the underlying thesis to unfold. Subsequently, the research that investors conduct focuses on the 'why' of a particular asset or enterprise. On the other hand, traders are focused on the 'how' — as in, how much, how fast, and how likely. In other words, traders live in the world of probabilities. This is because options expire, meaning that a proposed strategy cannot just address the magnitude of movement (or the y-axis); the trade must also pan out within the allocated time period (x-axis). When it comes to statistical analysis, traders must have a firm understanding of the overall architecture. For most practical applications, there are two types of probabilities: derivative and conditional. The former represents the odds of a particular outcome materializing across the entire distribution of the target dataset. In colloquial terms, the derivative probability is a baseball player's batting average last season. On the other end of the statistical spectrum, the latter concept represents the odds of an event materializing from a specific subset of the data. To extend the baseball analogy, a conditional probability would be the equivalent of a player's batting average when there are runners in scoring position (RISP). For the purposes of trading, conditional probability is essentially the 'probability of the now' — how likely is the proposed setup to work when you decide to pull the trigger? While the above concept may sound simple, calculating conditional probabilities requires critical discretization. Going back to the baseball analogy, batting average with RISP can be calculated because RISP is a discrete event — if there are no runners on second or third base, then there is no RISP. Similarly, the only practical way to discretize price action is to convert it into market breadth sequences — or sequences of accumulative and distributive sessions. By doing so, the dataset speaks one coherent language that is categorizable, quantifiable, and ultimately projectable. Analyzing Market Breadth to Narrow Down a Bullish Strategy Ultimately, market breadth is a representation of demand, and demand is a binary construct — it's either happening or it's not. Further, the balance of demand can provide traders with a statistical framework for the likelihood of transition from one behavioral state to another based on past conditional analytics. For example, in the past two months, PDD stock printed a '7-3-U' sequence: seven up weeks, three down weeks, with a net positive trajectory across the 10-week period. Since making its public market debut, this sequence materialized 44 times. In 54.55% of cases, the following week's price action results in upside, with a median return of 8.16%. On Friday, PDD stock closed at $100.58. Should the implications of the 7-3-U pan out as projected, PDD stock could reach nearly $109 in short order, perhaps in a week or two. Based on the market intelligence above, the most aggressive speculators may consider the 102/105 bull call spread expiring July 3. This transaction involves buying the $102 call and simultaneously selling the $105 call, for a net debit paid of $127 (which is the most that can be lost in the trade). Should PDD stock rise through the short strike price (105) at expiration, the maximum reward is $173, a payout of over 136%. What makes this trade attractive is the implied shift in sentiment. As a baseline, the chance that a long position in PDD stock will be profitable over any given week is only 50%. With the statistical response of the 7-3-U sequence, the odds of upside have tilted in favor of the bulls. Granted, it's a modest advantage, but the trade does favor the long side of the transaction. Additionally, the market is arguably unfamiliar with the risk-modeling protocol mentioned above. Is PDD Stock a Good Buy? On Wall Street, PDD stock carries a Moderate Buy consensus rating based on eleven Buy, eight Hold, and two Sell ratings over the past three months. PDD's average stock price target of $124.45 implies approximately 21% upside potential over the next twelve months. Leveraging Probability to Take Advantage of PDD Stock While the investment narrative for PDD Holdings is arguably compelling, it may take a while for analysts' projected price targets to materialize. On the flipside, speculators can use the leverage of options to potentially extract significant gains over a short period of time, so long as they're willing to take the risk of losing their entire principal. However, through the usage of conditional probabilities, one can improve the odds of success.
Yahoo
11-06-2025
- Business
- Yahoo
Wall Street Bulls Look Optimistic About PDD Holdings Inc. Sponsored ADR (PDD): Should You Buy?
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? Let's take a look at what these Wall Street heavyweights have to say about PDD Holdings Inc. Sponsored ADR (PDD) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. PDD Holdings Inc. Sponsored ADR currently has an average brokerage recommendation (ABR) of 1.78, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 18 brokerage firms. An ABR of 1.78 approximates between Strong Buy and Buy. Of the 18 recommendations that derive the current ABR, 11 are Strong Buy, representing 61.1% of all recommendations. Check price target & stock forecast for PDD Holdings Inc. Sponsored ADR here>>> The ABR suggests buying PDD Holdings Inc. Sponsored ADR, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements. Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. Although both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether. Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks. There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices. In terms of earnings estimate revisions for PDD Holdings Inc. Sponsored ADR, the Zacks Consensus Estimate for the current year has declined 29.3% over the past month to $8.78. Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for PDD Holdings Inc. Sponsored ADR. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Therefore, it could be wise to take the Buy-equivalent ABR for PDD Holdings Inc Sponsored ADR with a grain of salt. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PDD Holdings Inc. Sponsored ADR (PDD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
06-06-2025
- Business
- Yahoo
PDD Holdings Inc. (PDD): Jim Cramer Shares 'Death Rattle' For Firm
We recently published a list of . In this article, we are going to take a look at where PDD Holdings Inc. (NASDAQ:PDD) stands against other stocks that Jim Cramer discusses. PDD Holdings Inc. (NASDAQ:PDD) is a Chinese eCommerce company whose shares are flat year-to-date. Since it sources products from China and sells them in America, the firm has been caught in the center of trade tensions between the US and China. PDD Holdings Inc. (NASDAQ:PDD) had relied on the Deminimis rule to ship its products in the US. This rule exempted its parcels from tariffs, and once the exemption was lifted, the firm faced significant uncertainty. PDD Holdings Inc. (NASDAQ:PDD)'s shares sank by 19% in the days after its first quarter earnings that saw net profit drop by a whopping 47%. Cramer's remarks about the firm focused on the firm's warning that it was facing a growth slowdown and had to invest in order to support its customers and merchants. Here is what he said about PDD Holdings Inc. (NASDAQ:PDD): 'Did you see they said 'radical change in external policy environment, such as tariffs, has created significant pressure for our merchants, who often like the capability to quickly, and effectively, deal with this.' I think that means, death rattle David. . .well because if they can't adapt to the new world, this is virtually a trade embargo for their deminimis nonsense that they send over here that I've told you about when I ordered.' A close-up of a customer using the company's e-commerce platform whilst shopping online. Overall, PDD ranks 12th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of PDD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. This article is originally published at . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
06-06-2025
- Business
- Business Insider
SHEIN and Temu (PDD) See Their User Traffic Plunge amid Trade Tensions
The recent end of the de minimis exemption is hurting U.S. user traffic for Chinese e-commerce platforms SHEIN and Temu (PDD). According to data shared from Sensor Tower to CNBC, Temu's daily active users in the U.S. dropped by 52%, while SHEIN's fell by 25%. Monthly average users also declined by 30% and 12%, respectively, between March and May. These drops happened at the same time that both companies reduced their U.S. advertising in response to new trade rules and shrinking engagement. Confident Investing Starts Here: The de minimis rule had allowed items under $800 to enter the U.S. tariff-free, which helped platforms like Temu and SHEIN avoid taxes by shipping directly from China instead of using U.S. warehouses. In April, the Trump administration closed this loophole and applied a 120% tax to qualifying items that mostly targeted Chinese imports. In May, a new order lowered the tariff to 54%. As ad spending fell by 40% for Temu and by 65% for SHEIN on a year-over-year basis, their App Store rankings also dropped sharply: Temu slid from the top 3 to 132, while SHEIN fell from the top 10 to 60. PDD, which owns Temu, admitted in its latest earnings call that U.S. trade policy is hurting its business. The company warned that growth could continue to slow and stated that it would continue to invest in order to support sellers and buyers during these changes. In fact, to lower shipping costs, Temu is now adding U.S.-based sellers and setting up local warehouses. SHEIN is also growing its U.S. infrastructure, with warehouses located in Indiana, Texas, New Jersey, and California, as well as logistics offices in Seattle and Los Angeles. Is PDD a Good Stock to Buy? Turning to Wall Street, analysts have a Moderate Buy consensus rating on PDD stock based on 11 Buys, eight Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average PDD price target of $124.45 per share implies 24.8% upside potential.
