Pinduoduo Inc. (PDD) Stock on a Fluctuating Trajectory, Here’s Why

Pinduoduo Inc. (PDD), a company operating an e-commerce platform, has surged 6.50% in the premarket trading session. Consequently, the stock was trading at $42.51 when last checked. During Monday’s regular trading session, the stock slid by 6.13% to close the day at $39.99. The decline was followed by a surge in aftermarket, owing to the release of financial results by the company.

Q4 2021 Results

On Monday, PDD announced the results for the fourth quarter of the fiscal year 2021. The total revenues generated during the quarter were $4.2 billion, depicting an increase of 3% as compared to the same quarter of 2020. The net income attributable to the shareholders of the company stood at $1.03 billion compared to $216.2 million during the fourth quarter of the fiscal year 2021. The basic and diluted earnings per share stood at $0.83 and $0.73 respectively during the quarter against basic and diluted loss per share of $0.18 during the same quarter of the preceding year.

FY 2021 Results

Alongside, PDD also reported the results for the full year 2021. The company generated total revenue of $14.7 billion during the year, an increase of 58% on a year-over-year basis. The net income attributable to shareholders of Pinduoduo during the fiscal year 2021 was $7.7 billion versus a net loss of $1.12 billion during fiscal 2020. The basic and diluted income per share for fiscal 2021 stood at $0.97 and $0.85 respectively versus a basic and diluted loss per share of $0.95 during 2020.

Comments from CEO of PDD

Mr. Lei Chen, Chairman, and CEO of PDD commented that the company has made an uncanny shift from S&M to R&D during the fiscal year 2021. In the long term, the company would invest more and more in the R&D and agricultural sector as well. The company intends to allocate the profits it generated during the fourth quarter of 2021 towards its agricultural initiative.

What’s Ahead for PDD?

Looking ahead, analysts are holding a negative evaluation of the stock. The technical indicators are looking bleak for PDD. Hence, it is expected to perform weakly in the next couple of weeks.