Pinduoduo Inc. (PDD) Earnings Miss and Founder Steps Down From Board, Jefferies Reiterates Hold

Jefferies analyst Thomas Chong reiterated a Hold rating and $188.30 price target on Pinduoduo Inc. (NASDAQ: PDD) after the company reported that 4Q20 Total revenue grew 146% YoY to RMB26.5bn, ahead of consensus and our estimates mainly on merchandise sales. Online marketing revenue grew 95% YoY to RMB18.9bn and transaction services revenue grew 105% YoY to RMB2.3bn. Merchandise sales reached RMB5.4bn. GAAP sales and marketing expenses reached RMB14.7bn (vs our estimate at RMB14.3bn), representing 55% of revenue. Non-GAAP OP loss reached (RMB1,115m). Non-GAAP net loss reached (RMB185m), behind consensus and our estimates of non-GAAP income at RMB141m and RMB598m respectively. The company also announced that its founder, Colin Huang, has stepped down from the board to pursue research in food and life sciences.

The analyst stated "We maintain our Hold rating and our PT. Downside risks include: (1) GMV falls below market expectations; (2) material slowdown in users and annual active buyers. Upside risks include: (1) better than expected revenue growth on improved monetization; (2) profitability comes earlier than expected on lower than expected marketing spending."

For an analyst ratings summary and ratings history on Pinduoduo Inc. click here. For more ratings news on Pinduoduo Inc. click here.

Shares of Pinduoduo Inc. closed at $146.60 yesterday.

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