PDD’s stock rose above an important resistance level while investors awaited its Monday results. The stock price soared to $127, the highest since March 24 and 45 percent above its low point of 2024. This article gives a prediction for the stock’s performance before it reports earnings.
PDD Holdings publishes earnings
PDD Holdings’ earnings are likely to have the biggest impact on its stock price. They will be announced Monday. The results of this quarter will be a reflection of China’s intense competition and a reduction in marketing expenditures for the Temu brand.
Recently, media reports highlighted concerns regarding Temu. These included the slowing of sales in the United States following the ending de minimis ,, which allowed sellers to send products into the United States and not pay any tax.
The company also faced big challenges in competing with Amazon who introduced a product similar to its own. Temu also had problems in Europe where they were accused of not preventing the sale of illegal goods.
PDD reported that its revenues grew by 10% to $13.1 Billion in the first three months of 2018. The strong expenditures have pushed down its net and operating profits.
Net income dropped by 47%, to $2 billion. Operating profit fell by 38%. Lei Chen said the following about their profits:
These investments affected short-term profits, but allowed merchants to focus on sustainable, high-quality growth. This strengthened the health of the platform in the long term.
He warned the CFO that external factors could continue to slow down the economy.
Our financial results will continue to show the effect of our sustained investment in the ecosystem, as we help merchants and customers through these uncertain times.
Yahoo Finance’s data shows the revenue of the company is projected to reach CNY 103.2 Billion, an increase of 6.3% from the previous year. The company’s earnings per share will fall to CNY 14,8 from CNY 23,24 during the same time period in 2017.
PDD’s stock could benefit from a better-than-expected earnings report now that expectations have been low.
PDD Holdings Stock Price Analysis
On the daily chart, it is clear that PDD’s stock price has formed a pattern of double bottoms at $87.56 both in August 2017 and April 2018. Double-bottom patterns are among the most popular bullish patterns used in technical analysis.
Stock has moved over the top of the triangle pattern. The stock has formed a gold cross as both the moving averages of 50 days and 200 days crossed.
The stock, however, has formed a Doji candle. This could indicate a possible reversal following earnings. A reversal of this kind could see the stock retesting its important support level at $120.
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The post PDD stock’s doji may indicate a change in direction as the earnings report could show a drop. This will be updated as new information is released.
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