Freedom Capital Markets on Tuesday raised its target price for PDD Holdings from USD 140.00 to USD 170.00 while maintaining a Buy rating on the Chinese e-commerce company. The new target is broadly in line with investor sentiment: data suggest the stock currently appears undervalued, with the average analyst target price as high as USD 201.84.

The upgrade came after what Freedom Capital described as a mixed quarterly report. The firm noted that PDD had demonstrated resilience by adapting to US tariffs and the removal of the de minimis tax exemption on shipments from China. Despite these headwinds, PDD generated USD 58.8 billion in revenue over the past twelve months, maintaining a healthy revenue growth rate of 12.5%.

While the higher target price reflects a constructive outlook, Freedom Capital also warned that, as PDD prioritises long-term investment, margin pressure is likely to persist at least in the medium term. The company continues to post a solid gross margin of 56.7%, and its balance sheet holds more cash than debt.

PDD’s performance in the coming quarter will remain closely tied to developments in its US and China businesses, while contributions from other international expansion markets are gradually increasing.

PDD reported its financial results for the third quarter of fiscal year 2025, with both earnings per share and revenue missing expectations. The company posted EPS of RMB 21.08, below the anticipated RMB 23.50, and revenue of RMB 108.3 billion, short of the RMB 145.2 billion forecast.

Benchmark kept its Buy rating on PDD, citing moderate revenue growth and healthy expansion in its Temu international business. Meanwhile, BofA Securities maintained a Neutral rating on the stock, even though PDD’s profit beat expectations by 25%, supported by a rebound in adjusted operating growth.

Market Commentary:

Bernstein downgraded PDD from Outperform to Market Perform, highlighting concerns that its domestic business is maturing. The firm pointed to the lack of growth in daily active users and time spent on the platform. These developments underscore the differing institutional views on PDD’s current financial performance and its future prospects.