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Pinduoduo Inc. Sponsored ADR (PDD) Gains But Lags Market: What You Should Know

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In the latest trading session, Pinduoduo Inc. Sponsored ADR (PDD - Free Report) closed at $92.45, marking a +0.17% move from the previous day. The stock lagged the S&P 500's daily gain of 0.98%.

Coming into today, shares of the company had gained 3.63% in the past month. In that same time, the Retail-Wholesale sector gained 0.25%, while the S&P 500 gained 2.57%.

Wall Street will be looking for positivity from PDD as it approaches its next earnings report date. On that day, PDD is projected to report earnings of $0.15 per share, which would represent year-over-year growth of 250%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.01 billion, up 91.63% from the year-ago period.

PDD's full-year Zacks Consensus Estimates are calling for earnings of $0.67 per share and revenue of $16.39 billion. These results would represent year-over-year changes of +172.83% and +85.98%, respectively.

Investors should also note any recent changes to analyst estimates for PDD. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PDD is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note PDD's current valuation metrics, including its Forward P/E ratio of 137.75. Its industry sports an average Forward P/E of 57.33, so we one might conclude that PDD is trading at a premium comparatively.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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