Shareholders might have noticed that PDD Holdings Inc. (NASDAQ:PDD) filed its second-quarter result this time last week. The early response was not positive, with shares down 5.4% to US$84.69 in the past week. The result was positive overall - although revenues of CN¥112b were in line with what the analysts predicted, PDD Holdings surprised by delivering a statutory profit of CN¥18.45 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the consensus forecast from PDD Holdings' 36 analysts is for revenues of CN¥468.6b in 2026. This reflects a credible 3.9% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be CN¥65.69, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CN¥479.6b and earnings per share (EPS) of CN¥63.53 in 2026. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

There's been no real change to the average price target of US$116, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on PDD Holdings, with the most bullish analyst valuing it at US$171 and the most bearish at US$85.04 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting PDD Holdings is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that PDD Holdings' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than PDD Holdings.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PDD Holdings following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PDD Holdings going out to 2028, and you can see them free on our platform here.

We also provide an overview of the PDD Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.