Pinduoduo Inc. (NASDAQ: PDD) will report its unaudited Q2 2021 financial results for the period ending June 30, 2021, on August 24, 2021.
Strong e-commerce business growth to drove revenue in Q2 2021
The robust e-commerce business growth due to online sales of goods and parcel shipments will continue impacting Q2 performance. Equally growing user activity and rising users engagement investments are expected to be tailwinds for the company. In addition, equally growing initiatives to enhance grocery and agriculture segments and agriculture-focused logistics infrastructure system demand will boost Q2 results. However, the strong performance will be offset by increasing offline and online expenses as well as uncertainties caused by the pandemic.
Stockearning’s earnings estimate for this quarter is -0.15. Historical EPS performance in the last 12 quarters has seen the company beat estimates six times (50%), and miss estimates four times (33%). For example, in Q1 2021 estimated EPS was -0.68, but the company reported earnings of -0.36.
Pinduoduo’s revenue grew 239% in Q1 2021
In Q1 2021, the company reported revenue of RMB22.167 billion, which was a 239% YoY growth but excluding merchandise sales revenue was up 161% YoY to RMB17.043 billion. As a result, the non-GAAP net loss was RMB1.89 billion.
Since the last earnings release, the company's stock has lost 40.9%. Additionally, following the earnings release, the stock price has been DOWN on seven occasions out of the past 12 quarters. Therefore, the Historical price reaction suggests a 58% chance for the stock price to go DOWN after earning release.
According to Stockearning’s algorithm, the first day predicted move after earnings release is 13% whole predicted move after seven days is 10%. The next day's volume after earnings is 2.64 million. The last time Pinduoduo released its earnings, its share price dropped 5.54%.
China Renaissance analysts upgraded PDD to “Buy” from “Hold”
Ahead of the earnings release China Renaissance analyst Charlie Chen has upgraded the stock from Hold to Buy but maintained the target price of $150. According to the analyst, already moderating growth has been priced into PDD stock, with the recent correction equally overdone. In addition, Chen told investors in a research note that regulatory risk is focusing mostly on antitrust, and the company's core business model is still intact.
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