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The company is expected to report revenue of about 17.2 billion dollars. This update will be a key look at how Temu, its global shopping platform, is handling rising shipping costs and new trade rules in the US and Europe. We will also be watching for signs that its domestic business in China can keep growing despite a tougher economy there.
Morgan Stanley downgraded the company to Equal Weight, which means they now expect the stock to perform in line with the broader market rather than beating it. The firm set a price target of 90 dollars.
This move reflects growing caution about how much PDD must spend to keep its lead in the discount shopping space. While the company still has a massive cost advantage by connecting shoppers directly to factories, rising competition and the high cost of expanding Temu globally are making some analysts more conservative about its near-term profit growth.
Source: Morgan Stanley
PDD Holdings is scheduled to share its latest quarterly performance on November 18. Analysts are looking for revenue of about 17.18 billion dollars and profit of about 2.77 dollars per share. The focus will likely be on how much the company is spending to grow Temu, its global shopping app, and whether its core business in China is still generating enough cash to fund that expansion.
After PDD Holdings reported its August results, we cut our quality score to 3.1. We lowered our ratings for how fast sales are growing, how well protected the business is from competitors, and the people running it. We reset our projections for transaction services revenue after growth in that segment slowed to 13% over the past three months. We have added the risk of higher costs from new US import taxes and the money the company is spending on merchant subsidies to what we track.
The European Union has accepted a proposal from Temu to fix issues related to the Digital Services Act, a set of rules that governs how online platforms must protect users and handle illegal content. This agreement helps Temu avoid potential fines and legal battles in one of its most important international markets.
For a company like PDD that relies on Temu for global growth, staying on the right side of European regulators is essential. This resolution suggests the company is successfully navigating the complex rules of international trade and digital safety, which is a key part of its ability to grow outside of China.
Source: Reuters
The record is choppy with several large misses lately. It suggests management is struggling to forecast its own results as the business pivots from rapid growth to heavy reinvestment.
| Expectation | |
|---|---|
| EPS | $2.77 |
| Revenue | $17.17B |
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