PDD Holdings Stock Is Beaten Down Now, but It Could 10x

Core Viewpoint - PDD's stock has significantly declined from its peak, presenting a potential buying opportunity despite current challenges [1][5][8] Company Overview - PDD is China's third-largest e-commerce company, founded nine years ago, focusing on lower-income shoppers and bulk discounts [2] - The company has launched a farm-to-table platform, disrupting traditional grocery models and becoming the largest online agricultural platform in China [2] International Expansion - In 2022, PDD expanded internationally with Temu, a cross-border marketplace, achieving over 167 million monthly active users, including 50 million in the U.S. [3] - PDD transitioned from a first-party to a third-party marketplace model, aligning more closely with Alibaba's business structure [3] Regulatory Environment - PDD has not faced the same level of regulatory scrutiny as Alibaba, potentially benefiting from the latter's challenges [4] Financial Performance - From 2018 to 2023, PDD's revenue grew at a CAGR of 80%, with net income rising at a CAGR of 178% from 2021 to 2023 [5] - Analysts project PDD's revenue to grow at a CAGR of 36% from 2023 to 2026, with EPS rising at a CAGR of 39% [7] Market Valuation - PDD currently trades at 7 times next year's earnings, which is lower than Alibaba and JD's valuations [7] - If PDD meets growth expectations and achieves a higher valuation multiple, its stock price could potentially reach about $930 by 2034 [7][8] Future Challenges - PDD must strengthen its competitive position against Alibaba and JD, continue expanding Temu, and navigate U.S.-China tensions to realize its growth potential [8]