Key Takeaways
- PDD Holdings has fallen 40% over the past year to about $80, below all five of its latest analyst price targets, which run from $93 to $117.
- The discount looks overdone: even Bank of America’s $117 target implies only about 10x forward earnings, below PDD’s three-year average of about 12x.
- Analysts have cut each year’s earnings estimate by about 20% over the past year, but they’ve barely moved them since June, even as PDD’s ad revenue growth slowed to 3%.
- The third-quarter report, expected in mid-to-late November, will show whether ad growth recovers in the first full quarter under the EU’s new parcel fee.
PDD Holdings (PDD) has fallen 40% over the past year. At around $80 a share, it now trades below all five of its latest analyst price targets.
That includes targets from firms that rate the stock only Hold.
The stock has bounced about 6% in the past month on Deutsche Bank’s upgrade and Beijing’s latest moves to prop up China’s stock market. But it’s still 42% below its 52-week high. So either analysts are slow to mark down PDD’s earnings, or the stock is simply too cheap. The numbers point to the second.
Even the Holds see upside
Here are the five latest calls, newest first:
- Deutsche Bank: upgraded to Buy on Oct. 29, target $105
- J.P. Morgan: Hold, target cut to $95 from $110 on Sept. 10
- Arete Research: downgraded to Hold on Sept. 7, target $93
- CGS International: Buy, target $114, reiterated Aug. 27
- Bank of America Securities: Hold, target raised to $117 from $113 on Aug. 26
The five average $105, about 31% above the last close. Arete’s $93, the lowest, is still 16% above it. The highest target, $117, comes from Bank of America, which rates the stock Hold. Just outside the five sits Barclays, which kept a Hold rating and an $89 target on Aug. 26, the same day as Bank of America’s call.
TIKR tracks 35 analysts on PDD Holdings. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on PDD Holdings, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See PDD Holdings’ Analyst Ratings
The estimates have held since June
Consensus has PDD’s normalized earnings per share slipping in 2026 before reaching a new high in 2028:
In yuan per ADS, the consensus is RMB68.54 for 2026, down 5% from 2025’s RMB72.38. It’s RMB82.54 for 2027 and RMB96.28 for 2028. That 2027 figure would only put PDD back where it was in 2024, when it earned RMB82.71. That’s a modest recovery to ask for.
Those estimates did fall hard: analysts have cut each year’s by about 20% over the past year. But since June 30, none has moved more than about 1%.
Investors are paying about 7x
The price investors will pay for those earnings has kept falling. PDD’s forward P/E sits near the bottom of its five-year range:
It hit a five-year low of 6.6x on Oct. 2 and stood at 7.1x on Nov. 2, against a three-year average of about 12x. The stock is down about 40% and estimates about 20%, so the shrinking multiple explains roughly half the slide.
That’s why the targets look reasonable. At about $11.50 a share of next-twelve-months earnings, the figure that 7.1x implies, the targets work out to between roughly 8x (Arete’s $93) and 10x (Bank of America’s $117). Every one is below PDD’s three-year average. J.P. Morgan’s and Arete’s targets are even below the stock’s past-year average of 8.5x.
So the targets need little more than estimates that hold and a multiple that drifts back toward last year’s.
The targets are coming down, too
Analysts haven’t stood still. J.P. Morgan cut its target to $95 from $110 on Sept. 10, days after Arete downgraded the stock. TIKR’s consensus target is down 26% over the past year:
That’s a smaller drop than the stock’s, so the market has marked PDD down much faster than analysts have. And even as Deutsche Bank upgraded the stock to Buy, it called Wall Street’s consensus optimistic.
The business also gives reasons for caution. Online marketing, about half of PDD’s revenue, grew just 3% in the second quarter. That was its third straight quarter at 5% or less. Temu has faced the EU’s €3 fee on low-value parcels since July 1.
PDD also sat on RMB456.4 billion of cash and short-term investments at June 30. It has never paid a dividend, though, and hasn’t repurchased shares in recent years. That may be part of why investors pay so little for its earnings.
Ads have to grow again
PDD’s third-quarter report, expected in mid-to-late November, covers the first full quarter under the EU fee. Analysts expect revenue of about RMB116 billion, up about 7%, and PDD has missed revenue estimates four quarters running. The line to watch is online marketing. Growth back above 5% would suggest merchants are spending again.
The stock looks too cheap here. PDD trades at about 7x earnings estimates that analysts stopped cutting in June, which prices in profits that keep shrinking. Even the Hold-rated firms see upside from here, with Barclays’ $89 the lowest of them.
Of course, if ad growth stays near 3%, or the EU fee hits Temu hard, analysts will likely cut again, and the targets would follow.
So what is PDD Holdings stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what PDD Holdings could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
