PDD Holdings

PDD

Specialty Retail · Consumer Cyclical

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Mar 31, 2026

How the score breaks down

Quality

Strong

Growth

Mixed

Cash Flow

Exceptional

Stability

Exceptional

Valuation

Strong

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Winston Score History

The full picture

PDD Holdings is a Chinese e-commerce company that runs two major online shopping platforms: Pinduoduo and Temu. Pinduoduo connects Chinese consumers with merchants selling discounted goods, especially groceries and everyday products, by encouraging group buying. Temu is its international platform, launched in 2022, that ships low-priced products directly from Chinese manufacturers to shoppers in the US, Europe, and dozens of other countries.

The company makes money by charging merchants for advertising and by taking a cut of sales on its platforms. PDD is headquartered in Shanghai and has grown rapidly, with a market cap near $125 billion. Its main competitive edge is an ultra-low-cost supply chain that connects factories directly to buyers, cutting out middlemen. The biggest risk the company faces is regulatory pressure — both from Chinese authorities and from Western governments that are scrutinizing cheap Chinese imports and data privacy practices tied to Temu's rapid expansion abroad.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+10.4% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-16.2% YoY

YoY Growth Rate

Earnings declining

Insider Activity

2.5%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$510.4B cash & investments

Quarterly Free Cash Flow

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

PDD Holdings is a rare growth stock that's already generating positive cash flow while growing at 10%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

55.9%

Premium pricing power — 55.9% gross margin

Profit after running costs

Operating Margin

19.9%

Healthy — 19.9% operating margin

Return on the money invested

ROCE

23.1%

Exceptional — 23.1% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales growth

Sales YoY

+9.7%

Steady sales growth (+9.7% YoY)

Profit growth

EPS YoY

-3.1%

Earnings shrinking (-3.1% YoY)

Slight earnings drop. Typical near a cyclical low.

How steady the profit is

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash

Cash Conversion

113%

Turns 113% of profit into real cash

Spare cash per sale

FCF Margin

24.4%

Converts sales into free cash efficiently (24.4%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

0.01

Conservative — low debt load (0.01)

Covers its interest

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

8.6x

no trend

Attractive valuation — P/E 8.6

P/E under 10. The price tag is small relative to last year's profit.

Cheaper or dearer next year

P/E vs Forward

+1.6

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Not applicable for this business.

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