PDD
🚀 Pinduoduo exhibits explosive growth (60% revenue increase) and strong profitability metrics (high margins, impressive ROIC) compared to peers like Alibaba.
💰 Despite its rapid growth, the stock appears significantly undervalued, trading at a low EV/Free Cash Flow multiple (around 7.3x) with substantial net cash.
🇨🇳 While risks associated with Chinese stocks and US-China trade tensions exist, the financial metrics present a compelling, potentially irresistible investment case at current levels.
@bernardodegarcia:
“What do you think of Pinduoduo and today’s drop? It fell, my goodness, it fell again! Well, if I already liked it this morning, with this 6% drop… lower, I like it even more! I have to… It’s just, it’s the problem with Temu, but well, I think… it’s trading at eight times! I mean, do you remember the video from this weekend? It’s trading at eight times, huh? … Pinduoduo, alright, let’s go quickly fast. 16 billion dollars of free cash flow. It has an enterprise value of 78, I mean, it has cash of… pla pla 44 billion dollars. Its revenues grow at 60%. Its margins are… we don’t see them, too much information. Its margins are at 61%. Careful, not as high as 74%, but they are at 61%, which is outstandingly good. Its ROIC is the envy of the town. The P/E is… I don’t know who gives it to you cheaper. And the EV/Free Cash Flow, ladies and gentlemen, is… it’s very hard for me to say no, I’m not going to buy Pinduoduo. It costs me a lot. And here’s the problem, here’s the problem we were saying, but then Bernardo, are you going to sell Tesla and buy Pinduoduo? Because you’re going to buy and compare and buy and compare and buy reactions. In the end, well, in the end, nothing.”
Watch the exact part of the video where @bernardodegarcia talks about Pinduoduo here:
Watch the video on YouTube
Read more articles by the world’s top 100 analysts on Pinduoduo (PDD) at the following link. PDD stock.
