Barclays Maintains Overweight Rating on PDD Holdings (PDD), Keeps $158 PT

On Tuesday, May 27, Barclays maintained an “Overweight” rating on PDD Holdings Inc. (NASDAQ:PDD) and kept a price target of $158. This decision came after an analysis of the company’s Q1 2025 results, which showed lower revenue than expected. This was primarily due to reduced transaction revenues. Barclays noted that this shortfall in transaction revenue was largely linked to PDD Holdings Inc.’s (NASDAQ:PDD) Temu platform earnings, which did not meet market expectations.

Barclays used third-party estimates of Temu’s gross merchandise volume (GMV) to conclude that its revenues were below the consensus forecasts, accounting for the majority of the miss in PDD Holdings Inc.’s (NASDAQ:PDD) transaction revenue.

Despite the Temu revenue miss, Barclays pointed out that PDD Holdings Inc.’s (NASDAQ:PDD) sales and marketing expenses for Temu in Q1 2025 were higher than expected. This indicates that the company increased its sales and marketing efforts outside the US. PDD Holdings Inc. (NASDAQ:PDD) seems to be pulling back from the US market for its cross-border full consignment model.

PDD Holdings Inc. (NASDAQ:PDD), previously Pinduoduo Inc., is a multinational commerce group. While it owns a portfolio of businesses, it is best known for its e-commerce platforms, Pinduoduo and Temu.

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Disclosure: None.