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Pinduoduo (PDD) to Report Q2 Earnings: What's in Store?

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Pinduoduo Inc. (PDD - Free Report) is scheduled to report second-quarter 2020 results on Aug 21.

For the second quarter, the Zacks Consensus Estimate for sales is pegged at $1.76 billion, indicating growth of 65.9% from the prior-year quarter.

Further, the consensus mark for bottom line stands at a loss per share of 18 cents, which has remained stable over the past 30 days.

The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same in the other two, the average negative surprise being 23.63%.

Factors to Note

The company’s strength across e-commerce business is likely to have contributed significantly to the second-quarter results. Moreover, boom in the online retail market owing to the ongoing coronavirus pandemic might have acted as a tailwind for the company in the quarter to be reported.

The resulting surge in online shopping may have driven growth in Pinduoduo’s annual active buyer base during the quarter under review.

Apart from this, the company’s live streaming service, which remains an important tool as it helps merchants to share their personal experience and interact with users, might have helped it in attracting shoppers to its platform.

Moreover, the service helps customers to verify products properly with the aid of product demonstrations and answer to the product related queries of merchants.

This, is turn, is likely to have aided the company in delivering enhanced shopping experience, which might have driven customer momentum in the to-be-reported quarter.

Further, Pinduoduo’s strengthening efforts toward integration of online traffic with offline retail experiences are likely to get reflected inthe second-quarter results.

Additionally, the company’s May 5 shopping festival that witnessed strong momentum across live streaming content is expected to have favored the to-be-reported quarter’s performance.

However, uncertainties related to coronavirus pandemic are likely to get reflected in the company’s second-quarter results.
Accelerating costs related to coronavirus are anticipated to have negatively impacted margin expansion of the company in the to-be-reported quarter.

Further, reduction in the advertising fees and offering subsidies on essentials like masks, disinfectants and other medical are expected to have weighed on the second-quarter performance.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Pinduoduo this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Pinduoduo has an Earnings ESP of -35.85% and a Zacks Rank #3.

Stocks to Consider

Here are some companies that have the right combination of elements to post an earnings beat this time around.

Deere Company (DE - Free Report) has an Earnings ESP of +25.37% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agilent Technologies, Inc. (A - Free Report) has an Earnings ESP of +5.00% and a Zacks Rank #2.

The Home Depot, Inc. (HD - Free Report) has an Earnings ESP of +4.93% and a Zacks Rank #3.

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