NASDAQ · Consumer Cyclical

PDD Holdings Inc.

PDD · Internet Retail

$79.56

▼ -0.3 (-0.38%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

A⤢

Gross Profit Margin 55.9%

Operating Margin 18.4%

Net Income Margin 11.8%

Fin. Health

A⤢

Years to Pay Off Debt 0.4 yrs

Working Capital $324.9B

Valuation

A⤢

Margin of Safety 66.6%

Price-to-Book 0.27x

Cash Flow

A⤢

Free Cash Flow $16.4B

Profitability

Gross Profit Margin 55.9%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 18.4%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 11.8%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About PDD Holdings Inc.

PDD Holdings Inc., a multinational commerce group that owns and operates a portfolio of businesses. The company operates Pinduoduo platform, which provides various product categories and interactive shopping experiences; and Temu, an online platform, which enables merchants to streamline their manufacturing and commercial operations. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. PDD Holdings Inc. was incorporated in 2015 and is based in Dublin, Ireland.

Market Data

Market Cap $113.2B

Enterprise Value -$316.4B

P/E (TTM) 8.36

Dividend Yield N/A

Exchange NASDAQ

Key Margins

Gross Profit 55.9%

Operating Margin 18.4%

Net Margin 11.8%

Company Info

Sector Consumer Cyclical

Industry Internet Retail

Employees 25474

Country Ireland

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering PDD Holdings Inc. at $79.56.

The business passes 4 of 7 of Graham's defensive criteria — adequate but not exceptional.

At $79.56, the stock trades below its Graham Number of $238.24 — suggesting a margin of safety exists.

The margin of safety of 66.6% exceeds Graham's recommended 33% threshold — a rare opportunity.

Trading below NCAV — Graham's deepest value signal. Rare for a quality business; investigate why the market is pricing it this way..

Conclusion: This stock is better suited for Graham's Enterprising investor — one willing to devote time and skill to security selection.

Showing Key Metrics

Income Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Gross Profit %	55.9%▲	55.5%•	N/A
Operating Margin %	18.4%▼	21.1%•	N/A
Net Income %	11.8%▼	18.6%•	N/A
Diluted EPS	8.48▼	16.52•	N/A

Balance Sheet Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Total Assets	$637.7B	$630.0B	N/A
Total Debt	$5.1B▼	$5.4B•	N/A
Working Capital	$324.9B▲	$305.2B•	N/A
Years to Pay Debt	0.41	0.23	N/A

Cash Flow Highlights

Metric	Q1 2026	Q4 2025
Free Cash Flow	$16.4B▼	$23.0B
Owner Earnings	N/A	N/A
CapEx % of Net Income	N/A	N/A

Income Statement

	2026	2025	2024
Tax Effect Of Unusual Items	-35,605	-178,051
Tax Rate For Calcs	0	0
Normalized EBITDA	17,535,000	53,201,836
Total Unusual Items	-145,000	-659,932
Total Unusual Items Excluding Goodwill	-145,000	-659,932
Net Income From Continuing Operation Net Minority Interest	12,547,000	23,019,069
Reconciled Cost Of Revenue	46,893,000	55,155,561
EBITDA	17,390,000	52,541,904
EBIT	17,390,000	52,541,904
Net Interest Income	-632,000	6,372,854
Interest Expense	632,000		0
Interest Income		6,372,854	5,233,232
Normalized Income	12,656,395	23,500,950
Net Income From Continuing And Discontinued Operation	12,547,000	23,019,069
Total Expenses	86,663,000	97,714,449
Total Operating Income As Reported	19,566,000	26,197,745
Diluted Average Shares	1,480,000	1,486,697
Basic Average Shares	1,404,000	1,402,590
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	12,547,000	23,019,069
Net Income Common Stockholders	12,547,000	23,019,069
Net Income	12,547,000	23,019,069
Net Income Including Noncontrolling Interests	12,547,000	23,019,069
Net Income Continuous Operations	12,547,000	23,019,069
Earnings From Equity Interest Net Of Tax	-96,000	159,801
Tax Provision	4,115,000	8,446,316
Pretax Income	16,758,000	31,305,584
Other Income Expense	-2,176,000	-1,265,015
Other Non Operating Income Expenses	-2,031,000	-605,083
Gain On Sale Of Security	-145,000	-659,932
Net Non Operating Interest Income Expense	-632,000	6,372,854
Interest Expense Non Operating	632,000		0
Interest Income Non Operating		6,372,854	5,233,232
Operating Income	19,566,000	26,197,745
Operating Expense	39,770,000	42,558,888
Research And Development	4,418,000	4,994,884
Selling General And Administration	35,352,000	37,564,004
Selling And Marketing Expense	33,773,000	34,352,348
General And Administrative Expense	1,579,000	3,211,656
Other Gand A	1,579,000	3,211,656
Gross Profit	59,336,000	68,756,633
Cost Of Revenue	46,893,000	55,155,561
Total Revenue	106,229,000	123,912,194
Operating Revenue	106,229,000	123,912,194

Balance Sheet

	2026	2025	2024
Ordinary Shares Number	5,693,586	5,693,586
Share Issued	5,693,586	5,693,586
Total Debt	5,122,000	5,378,795
Tangible Book Value	423,412,000	413,369,769
Invested Capital	423,427,000	413,385,156
Working Capital	324,913,000	305,242,724
Net Tangible Assets	423,412,000	413,369,769
Capital Lease Obligations	5,122,000	5,378,795
Common Stock Equity	423,427,000	413,385,156
Total Capitalization	423,427,000	413,385,156
Total Equity Gross Minority Interest	423,427,000	413,385,156
Stockholders Equity	423,427,000	413,385,156
Gains Losses Not Affecting Retained Earnings	-575,000	3,453,944
Other Equity Adjustments	-575,000	3,453,944
Retained Earnings	296,710,000	284,163,369
Additional Paid In Capital	127,292,000	125,767,661
Capital Stock	0	182
Common Stock	0	182
Total Liabilities Net Minority Interest	214,277,000	216,659,171
Total Non Current Liabilities Net Minority Interest	2,635,000	2,922,003
Non Current Deferred Liabilities	15,000	41,851
Non Current Deferred Taxes Liabilities	15,000	41,851
Long Term Debt And Capital Lease Obligation	2,620,000	2,880,152
Long Term Capital Lease Obligation	2,620,000	2,880,152
Long Term Debt
Current Liabilities	211,642,000	213,737,168
Other Current Liabilities	17,905,000	23,441,443
Current Deferred Liabilities	3,521,000	3,378,789
Current Deferred Revenue	3,521,000	3,378,789
Current Debt And Capital Lease Obligation	2,502,000	2,498,643
Current Capital Lease Obligation	2,502,000	2,498,643
Current Debt			5,309,597
Other Current Borrowings			5,309,597
Payables And Accrued Expenses	187,714,000	184,418,293
Current Accrued Expenses	77,309,000	10,733,946
Payables	110,405,000	173,684,347
Other Payable		4,890,448	4,026,851
Dueto Related Parties Current	1,254,000	1,086,540
Total Tax Payable		27,637,234	22,805,311
Accounts Payable	109,151,000	140,070,125
Total Assets	637,704,000	630,044,327
Total Non Current Assets	101,149,000	111,064,435
Other Non Current Assets	95,179,000	104,707,713
Non Current Deferred Assets	202,000	171,959
Non Current Deferred Taxes Assets	202,000	171,959
Goodwill And Other Intangible Assets	15,000	15,387
Net PPE	5,753,000	6,169,376
Accumulated Depreciation		-4,494,455	-3,925,392
Gross PPE	5,753,000	10,663,831
Leases		200,676	128,743
Other Properties	5,753,000	4,863,332
Machinery Furniture Equipment		5,599,823	4,675,976
Current Assets	536,555,000	518,979,892
Other Current Assets	8,745,000	1,486,776
Restricted Cash	76,213,000	73,830,824
Prepaid Assets		2,823,253	1,910,051
Receivables	15,526,000	18,530,770
Duefrom Related Parties Current	9,768,000	10,205,128
Taxes Receivable		3,024,945	699,033
Accrued Interest Receivable		191,568	205,041
Accounts Receivable	5,758,000	5,109,129
Cash Cash Equivalents And Short Term Investments	436,071,000	422,308,269
Other Short Term Investments	313,030,000	313,407,682
Cash And Cash Equivalents	123,041,000	108,900,587

Cash Flow

	2026	2025
Free Cash Flow	16,445,000	22,974,469
End Cash Position	199,254,000	182,731,411
Beginning Cash Position	182,732,000	163,389,470
Effect Of Exchange Rate Changes	-2,005,000	-1,087,377
Changes In Cash	18,527,000	20,429,318
Financing Cash Flow	0	-5,228,476
Investing Cash Flow	2,082,000	1,538,248
Operating Cash Flow	16,445,000	24,119,546

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $95.7B ▲ $106.2B +11.0%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 57.2% ▲ 55.9% -1.3pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 20.5% ▲ 18.4% -2.0pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 15.4% ▼ 11.8% -3.6pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$106.2B/qtr (≈$424.9B ann.)

vs > $1.5B annualised revenue

✅ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

2.54x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$16.4B

vs Positive

Operating Cash Flow

$16.4B

Latest quarter · Buffett's cash reality check

ROIC

3.6%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

0.3x

Net Assets: $423.4B

Asset Context — Internet Retail

Platform and internet businesses derive value from network effects, user data, and brand — intangibles that accounting rules don't capitalise. A low or negative Net Assets figure is expected and not a risk signal. ROIC and FCF per share are more relevant valuation anchors.

⚠️ Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.

Peers & Industry Comparison

Internet Retail — Auto-detected peers

Company	Price	Market Cap	P/E	Gross Margin	Net Margin	Revenue
PDD	$79.56	$113.2B	8.36	55.9%	11.8%	$106.2B
AMZN Amazon.com, Inc.	$244.39	$2,628.9B	31.5	50.6%	12.2%	$742.8B
BABA Alibaba Group Holding Limited	$107.10	$256.9B	16.5	39.8%	10.1%	$1,023.7B
JD JD.com, Inc.	$27.57	$37.2B	20.1	9.3%	1.0%	$1,323.7B
EBAY eBay Inc.	$108.24	$48.1B	25.0	71.8%	17.6%	$11.6B
ETSY Etsy, Inc.	$73.95	$7.0B	28.3	71.6%	9.8%	$2.9B

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.66%

Low — management has little skin in the game

Return on Equity (ROE)

3.0%

Weak — poor returns on equity

Return on Assets (ROA)

2.0%

Poor — assets are not generating adequate returns

Debt Trend YoY

-4.8% YoY

Debt is declining — management is deleveraging

Leadership Team

Lei Chen

General Counsel, Co-CEO & Co-Chairman of the Board

Age 45

Jiazhen Zhao

Co-CEO & Co-Chairman of the Board

Age 41

Jun Liu

Vice President of Finance

Age 42

Junyun Xiao

Senior Vice President of Operation

Age 45

Zhenwei Zheng

Senior Vice President of Product Development

Age 41

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	2.77%	39,408,032
BAILLIE GIFFORD & CO	1.99%	28,353,099
Vanguard Capital Management LLC	1.69%	24,125,658
H&H International Investment, LLC	1.39%	19,748,294
State Street Corporation	0.85%	12,033,697
HSG Holding Ltd	0.80%	11,348,426
Goldman Sachs Group Inc	0.68%	9,705,935
NetEase, Inc.	0.62%	8,866,480

Risk Analysis

Beta (Market Risk)

-0.03

Defensive — moves inversely to the market

Short Interest

4.0% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.01x

Conservative balance sheet — low financial risk

Current Ratio

2.54x

Strong liquidity — Graham approved

52-Week Price Range

Low: $78.51 Current: $79.56 High: $139.41

Currently at 2% of 52-week range

PDD Holdings Inc.

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry Comparison

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis