Macquarie raises Pinduoduo stock price target to $165 on strong profit

Chinese e-commerce giant Pinduoduo (PDD) significantly surpassed Q2 2025 earnings expectations, reporting EPS of 22.07 and revenue of 103.98 billion RMB, driven by strong gross margins and reduced marketing expenses from its international platform, Temu. This robust performance, coupled with an attractive valuation and continued gross merchandise value (GMV) share gains, prompted Macquarie to raise its price target to $165 while maintaining an Outperform rating, a sentiment largely echoed by other analysts like Barclays and Jefferies, despite lingering investor concerns regarding profitability fluctuations and market competition.

Analysis

Pinduoduo (PDD) delivered a significant outperformance in its second-quarter 2025 results, with earnings per share of 22.07 massively exceeding the 14.8 forecast, while revenue of 103.98 billion RMB narrowly beat projections of 103.2 billion RMB. This performance is largely attributed to reduced marketing expenditures on its international platform, Temu, amid geopolitical headwinds, combined with continued gains in gross merchandise value (GMV) market share. The company's financial health is underscored by robust trailing-twelve-month revenue growth of 35.67% and impressive gross margins of 59.73%. From a valuation perspective, its P/E ratio of 11.96 is presented as attractive relative to its earnings growth prospects. Consequently, a bullish consensus has formed among analysts, with Macquarie and Barclays raising their price targets to $165 and Jefferies to $146. However, a note of caution is warranted, as US Tiger Securities attributed the beat to lower operating expenses rather than fundamental business strength, and broader investor concerns persist regarding profitability fluctuations and intense market competition.

Key Decisions for Investors

• Given the strong earnings beat and multiple analyst upgrades, investors could view the current valuation as an attractive entry point, especially considering the 31% year-to-date return and continued GMV growth.
• It is critical to monitor the sustainability of margin expansion, as the profit beat was aided by reduced marketing spend which could be a temporary factor.
• Investors should watch for the impact of ongoing investments in merchant support programs, which could compress near-term monetization even as they build long-term market share.
• The upcoming second-half results will be a key catalyst, as the company faces an easier comparison period, providing a clearer view of its underlying growth trajectory against competitors.