Launched in September this year, Temu, an online platform selling incredibly cheap products, became an instant hit with American consumers. Temu is a subsidiary of PDD Holdings, which is also the parent company of China’s e-commerce giant Pinduoduo (NASDAQ:PDD). Investors should note that PDD stock has gained over 32% in three months. Moreover, given the success of Temu, the stock could continue to remain in positive territory.
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Recently, the Wall Street Journal, citing data from the analytics firm Sensor Tower, reported that Temu became the most downloaded app from November 1 to December 14. To date, Temu has witnessed about 10.8 million installations in the U.S., as the WSJ report highlighted.
Temu’s deep discounts resonate well with consumers, especially when high inflation and interest rates are taking a toll on their spending. The company states that it sources products from the world’s top suppliers and offers them to consumers at wholesale prices. It’s the affordability factor that has made Temu a great success.
On the other hand, its sister firm, PDD, continues to benefit from strong revenues from online marketing services.
Is PDD a Buy Right Now?
PDD stock is up about 44% year-to-date and has outperformed the broader markets. Furthermore, PDD stock has a Strong Buy consensus rating on TipRanks based on 13 Buy and one Sell recommendations. Meanwhile, these analysts’ average price target of $103.21 suggests an upside potential of 22.83%.
Besides analysts, PDD stock has positive signals from investors holding portfolios on TipRanks and hedge fund managers. Our data shows that hedge funds bought 1.3M PDD stock last quarter. Overall, PDD has a “Perfect 10” Smart Score on TipRanks. (Stay abreast of the best that TipRanks’ Smart Score has to offer.)
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