Pinduoduo (NASDAQ:PDD) delivers shareholders respectable 23% CAGR over 3 years, surging 4.2% in the last week alone
Pinduoduo Inc. (NASDAQ:PDD) shareholders might be concerned after seeing the share price drop 12% in the last month. But over three years, the returns would have left most investors smiling In the last three years the share price is up, 88%: better than the market.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
See our latest analysis for Pinduoduo
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During three years of share price growth, Pinduoduo moved from a loss to profitability. So we would expect a higher share price over the period.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Pinduoduo has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Pinduoduo stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Pinduoduo shareholders are down 29% for the year, falling short of the market return. Meanwhile, the broader market slid about 22%, likely weighing on the stock. Investors are up over three years, booking 23% per year, much better than the more recent returns. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. Before forming an opinion on Pinduoduo you might want to consider these 3 valuation metrics.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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