BofA Securities raised its price target on Pinduoduo to $117 from $113, citing margin improvement and sustained growth in high-margin services.
The firm maintained its Neutral rating on the stock, while Freedom Broker and Benchmark adjusted their targets to $150 and $114 respectively, both retaining Buy ratings. Pinduoduo’s second-quarter earnings exceeded expectations, with adjusted earnings per share of $19.33 versus a forecast of $18.35, though revenue of $112.36 billion fell short of the $113.90 billion estimate.
Online marketplace services revenue accelerated to 3.5% year-over-year from 2.5% in the prior quarter, with a projected rise to 6.7% in the third quarter. Gross merchandise value growth moderated to 8% from 11% in the previous period. The company’s P/E ratio stands at 9.4, while return on equity is 23%.
Analysts noted that Pinduoduo’s domestic operations face constraints from merchant support and ecosystem investments, limiting monetization despite a RMB100 billion support program easing take-rate pressure. Weak domestic demand and intensified competition in China and overseas markets were cited as ongoing challenges. Temu’s slower growth amid regulatory and international headwinds contributed to the revenue shortfall.
Management emphasized long-term upside from ecosystem investments, expecting sustained growth and further monetization potential. Take-rate stabilization is anticipated in 2027.
