11 Best Internet Retail Stocks to Buy According to Analysts

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7. PDD Holdings Inc. (NASDAQ:PDD)

Analyst Upside: 65.67%

Number of Hedge Fund Holders: 85

PDD Holdings Inc. (NASDAQ:PDD) is a Chinese multinational online commerce group and retailer that owns and operates a range of diverse businesses. It also has a strong logistics, sourcing, and fulfillment capabilities network that supports its operations. The company owns Pinduoduo, a popular online commerce platform in China, and also runs the fast-growing e-commerce marketplace Temu. Temu now operates in more than 50 countries worldwide.

Analysts are bullish on PDD Holdings Inc. (NASDAQ:PDD) and expect it to grow due to market share gains in China. Its continued expansion into international markets through the Temu platform is anticipated to accelerate and support this growth.

PDD Holdings Inc. (NASDAQ:PDD) is focusing on a high-quality development strategy and has been actively optimizing its platform ecosystem to deliver impactful results over the long run. This strategy has helped the company report impressive financial results. The company delivered 24% year-over-year revenue growth in fiscal Q4 2024, reaching RMB 110.6 billion. Revenue for the full year 2024 reached RMB 393.8 billion, representing a 59% year-on-year increase.

PDD Holdings Inc. (NASDAQ:PDD) also undertook various initiatives in H2 2024 to advance its high-quality development strategy and boost growth, including logistic support measures for e-commerce services in remote regions, a 10 billion fee reduction program, and a high-quality merchant support program. GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q4 2024 investor letter:

“Aside from transitory foreign exchange translation losses (as opposed to trading losses), the two other notable detractors from our portfolio were MEI Pharma and PDD Holdings Inc. (NASDAQ:PDD) in 2024.

PDD Holdings founder Colin Huang is who inspired us to “run 3x faster,” as the relentless corporate culture of PDD has built an e-commerce company with roughly the same GMV (gross merchandise value) of Amazon in one-third the time it took Amazon to build itself. Shares reacted negatively when the company decided to reinvest its record margins into even faster growth and creating a healthier supplier ecosystem. As it looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple.

PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices. We would not want to compete with the demanding corporate culture of PDD and Temu. Its operating model is relentless at identifying efficiency throughout the manufacturing and selling supply chain. Not only is it a more formidable competitor than Amazon, and growing much faster, but the valuation is 4x more attractive than Amazon’s…” (Click here to read the full text)

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