Pinduoduo Inc. (NASDAQ:PDD) shares are down more than 16% on Black Friday after reporting its most recent quarterly results. The company announced its fiscal third-quarter results before markets opened, beating the consensus for analyst ex[pectations on earnings. However, its quarterly revenue failed to match Street estimates.
Pinduoduo posted FQ3 non-GAAP earnings per share of $0.34, outperforming the consensus for analyst expectations of $0.04. In addition, its GAAP EPS of $0.04, was higher than the average analyst estimate of -$0.12, while revenue for the quarter increased by 61.7% from the same quarter last year to $3.34 billion, missing expectations by $690 million.
Is Pinduoduo undervalued?
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From an investment perspective, Pinduoduo shares trade at a compelling forward P/E ratio of 16.29, making the stock an exciting option for value investors.
In addition, analysts expect the company’s earnings per share to grow by more than 660% next year, thus gaining the attention of growth investors.
Technically, Pinduoduo shares seem to have recently plunged to complete a downward breakout from a descending channel formation. As a result, the stock has moved closer to the oversold conditions of the 14-day RSI.
Therefore, investors could target potential rebounds at about $82.22, or higher at $94.10, while $55.17 and $42.64 are crucial support zones.
In summary, although Pinduoduo missed revenue estimates, its decline on Friday could be related to the new covid variant-drive stock market crash. Therefore, it could still be an exciting buy.
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