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PDD Holdings Faces Revenue Growth Slowdown
PDD Holdings (NASDAQ: PDD), the parent company of Pinduoduo and Temu, reported a 13.6% drop in its stock this week following disappointing third-quarter earnings. The company generated approximately $60 billion in revenue over the past year, with a 9% year-over-year increase to $15.2 billion last quarter, a significant decline from 44% growth the previous year.
Furthermore, PDD Holdings is grappling with increased competition, particularly from Amazon in the United States, leading to higher marketing costs and a decrease in operating profit growth to just 3% year-over-year. The operating margin fell from 28% to 22% over the last twelve months due to these rising costs. Currently, the company’s price-to-earnings ratio stands below 12, making it appear cheap compared to the S&P 500 average of around 30, despite the challenging market conditions.
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