Back to top

Image: Bigstock

Earnings Estimates Moving Higher for PDD Holdings Inc. (PDD): Time to Buy?

Read MoreHide Full Article

Investors might want to bet on PDD Holdings Inc. (PDD - Free Report) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for PDD Holdings Inc. As there has been strong agreement among the covering analysts in raising estimates.

Current-Quarter Estimate Revisions

The company is expected to earn $1.69 per share for the current quarter, which represents a year-over-year change of +39.67%.

Over the last 30 days, two estimates have moved higher for PDD Holdings Inc. compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 68.89%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $5.69 per share, representing a year-over-year change of +42.96%.

The revisions trend for the current year also appears quite promising for PDD Holdings Inc. with three estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 29.08%.

Favorable Zacks Rank

The promising estimate revisions have helped PDD Holdings Inc. earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for PDD Holdings Inc. have attracted decent investments and pushed the stock 33.3% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

PDD Holdings Inc. (PDD) - free report >>

Published in