PDD (NASDAQ:PDD) Shares Gap Down – Here’s Why

PDD Holdings Inc. Sponsored ADR (NASDAQ:PDD) gapped down prior to trading on Wednesday . The stock had previously closed at $96.64, but opened at $88.69. PDD shares last traded at $84.1820, with a volume of 10,496,869 shares traded.

PDD News Summary

Here are the key news stories impacting PDD this week:

• Negative Sentiment: PDD reported first-quarter earnings and revenue that missed analyst estimates, despite revenue still rising year over year. The shortfall reinforced concerns that growth is slowing as competition in China remains intense. PDD Holdings Q1 Earnings Lag Estimates, Revenues Increase Y/Y
• Negative Sentiment: The company’s share price also faced a reset after management signaled significant supply-chain and logistics investment tied to Temu expansion, which may pressure margins in the near term. PDD stock faces Wall Street reset: Temu expansion, supply chain spending pressure outlook
• Negative Sentiment: Analysts turned more cautious: Nomura downgraded PDD from “strong-buy” to “hold,” while Barclays cut its rating to “equal weight” and lowered its price target sharply. Nomura downgrade via Zacks
• Negative Sentiment: Several legal headlines about securities-fraud investigations could add overhang for sentiment, even though they are still preliminary and do not prove wrongdoing. Securities Fraud Investigation Into PDD Holdings Inc. Continues

Analyst Upgrades and Downgrades

A number of brokerages have issued reports on PDD. Morgan Stanley set a $129.00 target price on shares of PDD in a report on Wednesday. Benchmark dropped their price target on shares of PDD from $160.00 to $127.00 and set a “buy” rating on the stock in a research note on Thursday. Sanford C. Bernstein dropped their price target on shares of PDD from $132.00 to $110.00 and set a “market perform” rating on the stock in a research note on Wednesday. The Goldman Sachs Group restated a “buy” rating on shares of PDD in a research note on Thursday. Finally, Jefferies Financial Group restated a “buy” rating on shares of PDD in a research note on Wednesday. Seven investment analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and an average target price of $131.33.

PDD Stock Down 4.1%

The firm’s 50 day simple moving average is $98.70 and its 200 day simple moving average is $106.55. The company has a market cap of $118.18 billion, a price-to-earnings ratio of 8.97, a price-to-earnings-growth ratio of 0.82 and a beta of 0.04.

PDD (NASDAQ:PDD) last announced its quarterly earnings results on Friday, May 15th. The company reported $0.34 EPS for the quarter. PDD had a net margin of 21.86% and a return on equity of 25.04%. The company had revenue of $15.41 million for the quarter. Analysts anticipate that PDD Holdings Inc. Sponsored ADR will post 10.98 EPS for the current fiscal year.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the stock. GAMMA Investing LLC increased its stake in shares of PDD by 595.0% during the fourth quarter. GAMMA Investing LLC now owns 278 shares of the company’s stock valued at $32,000 after acquiring an additional 238 shares during the period. Binnacle Investments Inc increased its stake in shares of PDD by 281.7% during the third quarter. Binnacle Investments Inc now owns 271 shares of the company’s stock valued at $36,000 after acquiring an additional 200 shares during the period. Smartleaf Asset Management LLC increased its stake in shares of PDD by 230.7% during the fourth quarter. Smartleaf Asset Management LLC now owns 377 shares of the company’s stock valued at $43,000 after acquiring an additional 263 shares during the period. Wexford Capital LP acquired a new position in shares of PDD during the third quarter valued at approximately $44,000. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC acquired a new position in shares of PDD during the fourth quarter valued at approximately $44,000. Institutional investors and hedge funds own 39.83% of the company’s stock.

About PDD

PDD (NASDAQ: PDD) is the holding company best known for operating Pinduoduo, a China-based, mobile-first e-commerce platform that emphasizes interactive, social shopping and group-buying mechanics to drive user engagement and low prices. Founded in 2015 by entrepreneur Colin Huang, the business has grown by connecting consumers directly with merchants and manufacturers, with particular emphasis on value-oriented goods and fresh agricultural produce. The company is based in Shanghai and completed a U.S.