Pinduoduo Inc. Sponsored ADR (PDD) Surges 6.9%: Is This an Indication of Further Gains?

Zacks Equity Research

26 October 2022 at 11:37 am·2-min read

Pinduoduo Inc. Sponsored ADR (PDD) shares soared 6.9% in the last trading session to close at $47.53. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 26.7% loss over the past four weeks.

Pinduoduo extended its rally, driven by a strong momentum across its online marketing and transaction services. Further, increasing advertising demand from merchants on PDD’s platform has been a tailwind. Also, the company’s well-performing Duo Duo Grocery service has been driving Pinduoduo’s customer momentum.

This company is expected to post quarterly earnings of $0.74 per share in its upcoming report, which represents a year-over-year change of +117.7%. Revenues are expected to be $4.49 billion, up 34.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Pinduoduo Inc. Sponsored ADR, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PDD going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Pinduoduo Inc. Sponsored ADR is part of the Zacks Internet - Commerce industry. Cars.com (CARS), another stock in the same industry, closed the last trading session 4.4% higher at $13.06. CARS has returned 10.7% in the past month.

For Cars.com , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.14. This represents a change of +366.7% from what the company reported a year ago. Cars.com currently has a Zacks Rank of #3 (Hold).

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Pinduoduo Inc. Sponsored ADR (PDD) : Free Stock Analysis Report

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