PDD Holdings Inc. American Depositary Shares (PDD)

FairStock Score: 89/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for a margin of safety and a durable business. PDD, which operates Pinduoduo and Temu, has attractive arithmetic at the close on 2026-10-13: $81.96 per ADS, a FairStock-calculated P/E of 8.83, P/B of 1.73, and a Graham Number of $128.15, giving a 36.04% margin of safety. The latest quarter provided, the second quarter of fiscal 2026 (2026-Q2), has revenue of $112.4B and net income of $27.2B, a 24.19% net margin. Debt is almost nil, with FairStock-calculated D/E of 0.01; ROE is 22.75%, ROCE 10.01%, and the Piotroski F-Score is 8/9. Trailing free cash flow is $110.8B, an 80.3% FCF yield, which is extraordinary and demands scrutiny for durability. But I also see provided revenue growth of 8.05% and profit growth of -11.61%, with the period not specified in the data. Altman Z-Score of 2.00 sits in a gray zone. FairStock's Lynch category is none because there are only 0 years of filed results and it needs 3. The business is internet retail, where price competition and low switching costs can erode advantages; I cannot call it a classic wide-moat franchise on these facts alone. The price may be cheap, but the declining profit trend and limited filing history mean I want more evidence before trusting the numbers as a durable bargain.

In plain English: PDD runs Pinduoduo and Temu, online shopping businesses. The latest quarter data shows it made $27.2B in net income and carries very little debt, so the business looks financially strong. The stock price looks cheap compared with its profits and asset value, but profits are shrinking and competition is tough.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer