US Tiger Securities analyst Bo Pei has upgraded the rating on China’s largest agricultural products platform Pinduoduo Inc (NASDAQ: PDD) from “hold” to “buy,” after having raised the price target to $80 from $50, as the company beat second-quarter revenue and profit estimates despite a challenging operating environment.
Contrarian Growth: The company reported revenue growth of 36% year-on-year to $4.69 billion in the second quarter, beating the consensus of $3.49 billion.
Pei stated in the research note seen by Benzinga that Pinduoduo "surprised" with "accelerated revenue growth" in the second quarter, while major competitors like Alibaba (NYSE:BABA) Group Holding (NYSE: BABA) and JD.com Inc (NASDAQ: JD) slowed down to different degrees, consistent with the macro trend.
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“While management did not share detailed outlooks for 3Q and 2H, we believe the strength was mainly driven by solid execution and robust demand for value for money products as consumers are more price-sensitive facing macro uncertainties,” Pei stated in the note.
Price Action: Shares of Pinduoduo closed 14.71% higher at $66 on Monday after the company reported a set of numbers for the second quarter. The stock has rallied by over 38% in the last month.
Outlook: Pei said Pinduoduo's solid top-line growth will likely continue in the second half, allowing investors to treat it as a growth play again. The analyst has increased his third-quarter marketing services revenue estimate by 19% and transaction revenue estimate by 28% on strong grocery demand.
Latest Ratings for PDD
| Jan 2022 | DBS Bank | Upgrades | Hold | Buy |
| Nov 2021 | Barclays (LON:BARC) | Initiates Coverage On | Equal-Weight | |
| Aug 2021 | B of A Securities | Maintains | Buy |
View the Latest Analyst Ratings
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