In May, a significant 58% drop was observed in the daily U.S. user base of Temu, a platform operated by PDD Holdings (PDD, Financial). This decline, as reported by data from Sensor Tower, coincides with the U.S. government's decision to close the "de minimis" loophole on May 2. Following this regulatory change, Temu notably reduced its advertising expenditures within the U.S. market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 37 analysts, the average target price for PDD Holdings Inc (PDD, Financial) is $131.00 with a high estimate of $179.53 and a low estimate of $89.77. The average target implies an upside of 33.23% from the current price of $98.33. More detailed estimate data can be found on the PDD Holdings Inc (PDD) Forecast page.
Based on the consensus recommendation from 41 brokerage firms, PDD Holdings Inc's (PDD, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for PDD Holdings Inc (PDD, Financial) in one year is $227.74, suggesting a upside of 131.61% from the current price of $98.33. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the PDD Holdings Inc (PDD) Summary page.
PDD Key Business Developments
Release Date: May 27, 2025
- Revenue: RMB95.7 billion, a 10% increase year over year.
- Online Marketing Services Revenue: RMB48.7 billion, up 15% from the same quarter of 2024.
- Transaction Services Revenue: RMB47 billion, up 6% from the same quarter last year.
- Total Cost of Revenues: RMB40.9 billion, a 25% increase from Q1 2024.
- GAAP Operating Expenses: RMB38.6 billion, a 37% increase from the same quarter of 2024.
- Non-GAAP Operating Expenses: RMB36.5 billion, up from RMB25.6 billion in Q1 2024.
- Non-GAAP Sales and Marketing Expenses: RMB32.8 billion, up 44% year over year.
- Non-GAAP Operating Profit: RMB18.3 billion, down from RMB28.6 billion in the same quarter last year.
- Non-GAAP Operating Profit Margin: 19%, down from 33% for the same quarter last year.
- Net Income Attributable to Ordinary Shareholders: RMB14.7 billion, compared to RMB28 billion in the same quarter last year.
- Basic Earnings per ADS: RMB10.59, compared to RMB20.33 in the same quarter of 2024.
- Diluted Earnings per ADS: RMB9.94, versus RMB18.96 in the same quarter of 2024.
- Non-GAAP Net Income Attributable to Ordinary Shareholders: RMB16.9 billion, compared to RMB30.6 billion in the same quarter last year.
- Non-GAAP Diluted Earnings per ADS: RMB11.41, versus RMB20.72 in the same quarter of 2024.
- Net Cash Generated from Operating Activities: RMB15.5 billion, compared with RMB21.1 billion in the same quarter last year.
- Cash, Cash Equivalents, and Short-term Investments: RMB364.5 billion as of March 31, 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PDD Holdings Inc (PDD, Financial) has launched a substantial RMB100 billion support program to assist merchants, aiming to lower fees and drive sales.
- The company reported a 10% year-over-year increase in total revenues to RMB95.7 billion, driven by growth in online marketing and transaction services.
- PDD Holdings Inc (PDD) is committed to long-term investments in its platform ecosystem, focusing on high-quality development strategies.
- The company has expanded its support to small and medium-sized merchants, enhancing their operational efficiency and reducing costs.
- PDD Holdings Inc (PDD) has introduced consumer-focused initiatives, such as the RMB10 billion merchant giveback program and direct discount programs, to stimulate demand and support merchants.
Negative Points
- The company's profit margins have significantly declined, with a notable drop in net income attributable to ordinary shareholders compared to the previous year.
- PDD Holdings Inc (PDD) faces intensified competition in the Chinese e-commerce sector, particularly from first-party online retailers.
- The company's third-party marketplace model has inherent limitations in benefiting from certain policy incentives, affecting price competitiveness.
- External policy changes, such as tariffs, have created significant pressure on merchants, impacting their ability to adapt quickly.
- The company's substantial investments in merchant support initiatives have led to a mismatch between business investment and return cycles, weighing on short-term profitability.
