Market Overview

Why KeyBanc Is Bullish On Pinduoduo Despite Short-Term Challenges

Why KeyBanc Is Bullish On Pinduoduo Despite Short-Term Challenges

While Pinduoduo Inc’s (NASDAQ: PDD) near-term prospects remain under pressure due to elevated competition, its big new customer wins and market share gains in high-frequency categories bode well for growth in the long term, according to KeyBanc Capital Markets.

The Pinduoduo Analyst: Hans Chung maintained an Overweight rating on Pinduoduo, with a $100 price target. 

The Pinduoduo Thesis: The company reported mixed second-quarter results Friday, with in-line revenue due to a higher take rate and a better operating loss due to lower sales and marketing expense, Chung said a Monday note. (See his track record here.)

Despite stiffening competition and higher promotions from peers, Pinduoduo incurred higher expenses on new customer acquisitions to capitalize on the acceleration in e-commerce adoption, the analyst said. 

"We view PDD's change in growing tactics as a positive move from a LT perspective as high-frequency categories help drive user engagement and stickiness to the platform, and eventually could lead to upselling opportunities."

Agriculture e-commerce is a compelling long-term opportunity for Pinduoduo, given its large total addressable market and barriers, Chung said. 

The team purchase model gives the company a unique advantage, and efforts to improve the supply chain and food safety "could further enhance its competitive moat," the analyst said. 

The company has a long runway for growth, given its low monetization, massive user scale and healthy engagement, according to KeyBanc. 

PDD Price Action: Shares of Pinduoduo were trading higher by 0.14% at $84.12 at the time of publication Monday.

Related Links: 

Tesla In A Simmering Discord With Chinese E-commerce Giant Pinduoduo Over Discounted Model 3 Sedans

Tesla Denies Affiliation With Pinduoduo Group Model 3 Purchase In China

Latest Ratings for PDD

Nov 2020Nomura InstinetUpgradesNeutralBuy
Nov 2020JP MorganUpgradesNeutralOverweight
Nov 2020B of A SecuritiesUpgradesNeutralBuy

View More Analyst Ratings for PDD
View the Latest Analyst Ratings


Related Articles (PDD)

View Comments and Join the Discussion!

Posted-In: e-commerceAnalyst Color Earnings News Price Target Reiteration Global Analyst Ratings

Latest Ratings

PMTB of A SecuritiesMaintains18.5
IVRB of A SecuritiesMaintains3.0
EFCB of A SecuritiesMaintains15.5
NYMTB of A SecuritiesMaintains3.5
NLYB of A SecuritiesMaintains8.5
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at