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Pinduoduo (PDD) will announce its second quarter results: what does it hold for us? – August 25, 2022

Pinduoduo inc. (PDD Free Report) is set to release its second quarter 2022 results on August 29.

For the second quarter, Zacks’ consensus estimate for sales is set at $3.54 billion, indicating a 0.8% decline from the reported figure for the year-ago quarter.

The earnings-per-share consensus mark is set at 38 cents, suggesting a decline of 13.6% from the figure reported a year ago.

Pinduoduo’s earnings have exceeded the Zacks consensus estimate for the past four quarters, with the average surprise being 606.8%.

Factors to Note

The company’s strength in the e-commerce space likely contributed significantly to the second quarter’s performance.

Pinduoduo’s strengthening efforts towards integrating online traffic with offline retail experiences should be reflected in the second quarter results.

Strong momentum in its online marketing and transaction services should have continued to drive revenue growth in the quarter under review.

The increase in advertising demand from merchants on the PDD platform should have benefited the company in the quarter ahead.

Apart from that, the company’s successful Duo Grocery service probably contributed well.

However, the company’s sluggish merchandise sales likely hurt revenue growth in the second quarter.

Escalating pandemic-induced costs are expected to have had a negative impact on margin expansion in the quarter ahead.

Rising payment processing fees and rising costs for cloud services and expenses associated with online marketing services should have been of concern.

What our model says

Our proven model does not conclusively predict an earnings beat for Pinduoduo this time around. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings. But it is not the case here. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Pinduoduo currently has an earnings ESP of 0.00% and a Zacks rank #3.

Actions to Consider

Here are a few companies that have the right combination of elements to post a beat profit this quarter.

BrownForman (BF.B Free Report) has an ESP on Earnings of +5.03% and a Zacks Rank of 3 at present. You can see the full list of today’s Zacks #1 Rank stocks here.

BrownForman is expected to report fiscal 2023 first quarter results on August 31. Zacks’ consensus estimate for BF.B’s earnings is pegged at 45 cents per share, suggesting a 12.5% ​​increase over the reported figure from a year earlier.

Campbell’s Soup (pcb Free Report) has a +0.60% Earnings ESP and Zacks Rank #2 at present.

Caterpillar is expected to report its fourth quarter fiscal 2022 results on September 1. Zacks’ consensus estimate for CPB’s earnings is pegged at 56 cents per share, suggesting a 1.8% increase over the figure reported the previous year.

Calavo producers (CVGW Free Report) has a +2.78% Earnings ESP and is currently ranked #3 in Zacks.

Calavo Growers is expected to release third quarter fiscal 2022 results on September 1. Zacks’ consensus estimate for CVGW’s earnings is pegged at 36 cents per share, while it reported a loss of 17 cents per share in the year-ago quarter.

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