3 Things About Pinduoduo That Smart Investors Know

Pinduoduo's (NASDAQ: PDD) stock recently rallied after the Chinese e-commerce company posted its fourth-quarter report on March 21.

Its revenue rose 3% year over year to 27.23 billion yuan ($4.27 billion), which missed analysts' estimates by $440 million. However, it posted an adjusted net profit of 8.44 billion yuan ($1.33 billion), compared to a net loss of 184.5 million yuan a year ago, and its adjusted earnings of $0.92 per ADS crushed analysts' expectations by $0.55.

That earnings beat deflated the bearish belief that Pinduoduo would struggle to generate sustainable profits from its discount marketplace. It also indicated its beaten-down stock, which was cut in half over the past six months amid China's unpredictable crackdown on its top tech companies, could be undervalued at three times this year's sales.

Source Fool.com