PDD Holdings Inc. Sponsored ADR (NASDAQ: PDD), the Chinese e-commerce giant, recently reported its Q4 2024 earnings, delivering a notable surprise on the bottom line but falling short on the top line. Here’s a breakdown of the results and what they mean for investors.
Earnings Beat, Revenue Miss
For the quarter ended December 2024, PDD posted:
- Earnings per share (EPS): $2.76 (beating the Zacks Consensus Estimate of $2.56)
- Revenue: $15.15 billion (missing expectations by 3.34%)
Compared to the same quarter last year:
- EPS grew from $2.40 → $2.76 (+15%)
- Revenue increased from $12.52 billion → $15.15 billion (+21%)
Despite the revenue miss, the company delivered a 7.81% positive earnings surprise, marking the third EPS beat in the last four quarters. However, PDD has only topped revenue estimates once during this period, signaling some inconsistency in top-line growth.
Stock Performance and Market Reaction
PDD shares have soared +29.8% year-to-date (YTD), significantly outperforming the S&P 500, which has dipped -3.5% over the same period. This strong rally reflects growing investor confidence in PDD’s profitability and operational efficiency despite its revenue shortfall.
Outlook and Industry Trends
Looking ahead, analysts expect:
- Next quarter EPS: $2.83
- Next quarter revenue: $15.16 billion
- Full-year 2025 EPS: $12.21
- Full-year revenue: $65.75 billion
PDD operates in the Internet – Commerce industry, which is currently ranked in the top 26% of Zacks’ 250+ industries. Historically, industries in the top 50% have outperformed the bottom half by a 2-to-1 margin, suggesting a favorable environment for PDD.
Key Factors to Watch
- Management Commentary: PDD’s post-earnings call will be crucial in determining the stock’s near-term direction. Investors will focus on forward guidance and management’s strategy to boost revenue growth.
- Earnings Revisions: The stock’s future performance will depend heavily on analysts’ earnings estimate revisions in the coming days.
- Competitive Landscape: Rival Chewy Inc. (NYSE: CHWY) is set to report its quarterly results on March 26, 2025, with expected EPS of $0.21 (+16.7% YoY) on $3.2 billion in revenue (+13.1% YoY). PDD’s relative performance against industry peers will be a key factor for investors.
Bottom Line
While PDD’s latest quarterly report showed strong earnings growth, its revenue miss may raise concerns about its top-line expansion. However, the stock’s impressive YTD performance and strong industry positioning suggest it remains a contender in the e-commerce space. Investors will want to keep a close eye on estimate revisions and management’s future guidance to gauge PDD’s next move.
