Shares of Chinese eCommerce platform PDD Holdings (NASDAQ:PDD) surged nearly 15% in the pre-market session today after reporting that its third-quarter results comfortably outperformed the Street’s expectations. Revenue jumped by 94% year-over-year to $9.44 billion, surpassing estimates by nearly $1.7 billion. Further, earnings per American Depository Share (ADS) of $1.55 outpaced consensus estimates by $0.30.
The marked increase in the company’s top line was driven by a 39% increase in Online Marketing Services revenue and a 315% jump in Transaction Services revenue. At the same time, higher fulfillment fees, payment processing fees, and maintenance costs resulted in a 262% increase in PDD’s total cost of revenue.
At the same time, a decrease in general and administrative expenses, along with relatively unchanged research and development expenses, enabled PDD to increase its operating profit by 60% year-over-year to $2.28 billion.
The company generated a net cash of $4.46 billion from operating activities during the quarter. It had a mega cash pile of $27.8 billion at the end of the quarter.
What Is the Target Price for PDD Stock?
Overall, the Street has a Strong Buy consensus rating on PDD Holdings. Following a nearly 74% rise in the company’s share price over the past six months, the average PDD price target of $126.87 implies a modest 7.8% potential upside in the stock.
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