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PDD Holdings Inc (NASDAQ:PDD) shares took a significant hit in August, plummeting approximately 22% to $95.55, largely due to revenue falling short of expectations for the second quarter.
What Happened: For its fiscal second quarter, the parent company of Temu announced that revenue grew 86% year-on-year to $13.36 billion, which missed the analyst consensus estimate of $14.02 billion.
However, the company's adjusted earnings per ADS of $3.20 exceeded expectations.
Despite recent progress, company leadership highlighted challenges ahead, including slower revenue growth and intensified competition.
Several analysts reacted by lowering their price targets, with Citigroup downgrading the stock from Buy to Neutral.
Among other notable analyst revisions following earnings, Goldman Sachs cut its price target from $184 to $165 while retaining a Buy rating. Analyst Ronald Keung pointed out that the market might be overlooking the strength of PDD’s ecosystem and the clearer growth outlook for gross merchandise volume.
He also noted that the company's shift from aggressive ad monetization could support more sustainable growth.
Read Also: Temu Parent PDD Stock Free Falls After Hitting Death Cross: Time To Bail Out?
What Else: PDD, formerly known as Pinduoduo Inc., reported second-quarter revenue from online marketing services grew 29% year-over-year.
Transaction services revenue surged 234% Y/Y.
The company also reported an adjusted operating profit of $4.81 billion, up 139% Y/Y, and held $39.2 billion in cash as of June 30.
Despite solid progress, PDD’s leadership emphasized that the company faces challenges ahead, with expected pressure on revenue growth and profitability.
Investors can gain exposure to PDD by investing in the Invesco QQQ Trust, Series 1 (NASDAQ:QQQ).
By now you're likely curious about how to participate in the market for PDD Holdings — be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the case of PDD, which is trading at $94.96 as of publishing time, $100 would buy you 1.05 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
Price Action: According to data from Benzinga Pro, PDD has a 52-week high of $164.69 and a 52-week low of $88.01.
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