Bernstein on Pinduoduo Inc. (PDD): 'The Growth Opportunity Remains Very Significant'

Bernstein SocGen Group analyst Robin Zhu reiterated an Outperform rating and $150.00 price target on Pinduoduo Inc. (NASDAQ: PDD).

The analyst said: "To quote various conversations we’ve had with investors post Q3 reporting, PDD management guided for higher spending… and then, somewhat shockingly, delivered on the guidance. We’d urge investors to consider management’s comments about an older team through the lens of public relations management. But PDD’s greater reliance on distributor stock and white label goods than peers probably does put the company at a disadvantage in an environment where government relations gates access to consumption vouchers. The cost of subsidising out of pocket (e.g. over RMB1tn of quarterly GMV multiplied by 5-10% of the GMV mix and 15-20% discounts) to defend user purchase habits is not immaterial.

”. The world is a big place, and the cross-border ecommerce opportunity for Temu remains large outside the US. Would anyone be shocked if PDD traded on a princely 10-12x PE — multiplied by 2026E earnings, this time next year? In terms of the cadence of quarterly growth and the timing of a potential clearing event for PDD’s shares, we’d put forward Meituan this year as an example where investors front-ran the cadence of year on year comps, driving a big rally out of the gates in Q1."

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 $99.89 yesterday.

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