Pinduoduo Inc. ($PDD) Earnings (Q2 FY22)

 Pinduoduo Inc. ($PDD) Earnings and Opinion:


Pinduoduo is a company in the Consumer Cyclical sector and operates in the Internet Retail industry. The company operates an e-commerce platform in China. Pinduoduo was incorporated in 2015 and is currently headquartered in Shanghai, China. The company made its debut on the stock market in July of 2018.

Pinduoduo Earnings Results (Metrics in Yen):

  • Revenues of ¥31.44B beating expectations of ¥23.63B
  • Gross Profit of ¥23.48B beating expectations of ¥16.53B
  • Operating Income of ¥8.7B beating expectations of ¥4.36B
  • EPADS of ¥7.54 beating expectations of ¥2.75
Opinion:
Pinduoduo is currently moving higher in todays trading session after reporting earnings before the market opened this morning. The company looks to have killed earnings and beat expectations by some very wide margins. This is all pretty controversial right now though, there has been some issues between the China businesses issued on the US stock exchanges. The new audit agreement will go into place soon, and this may expose all of these Chinese companies for boosting earnings. The weird thing about Pinduoduo, is that they didn't report some of the key metrics that are normally on the earnings reports. As far as valuation goes, the P/E ratio sits at 24.28 and the P/S ratio sits at 3.83. The current ratio sits comfortably at 1.89 and cash overwhelmingly outweighs debt. Overall, the company looks to be in a pretty good position value wise. In my opinion, I am a little bit sketch about this company. It's like one of those things that seems too good to be true. I want to wait to see how much this company gets exposed when the new audit agreement comes into place. I feel like the earnings are being inflated to pick up the investors money. Which in reality, we don't know exactly what is going on with the company. If the audit reports come back solid from this company, it may look like a buy. For now, I am staying out of Pinduoduo until we can get some regulation on the Chinese stocks on US exchanges.


*Information from Yahoo Finance, CMLVIZ, Consensus Gurus, and Motley Fool

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