Yahoo Finance PDD Holdings (NASDAQ:PDD) shareholder returns have been incredible, earning 526% in 5 years
Long term investing can be life changing when you buy and hold the truly great businesses. And we've seen some truly amazing gains over the years. Don't believe it? Then look at the PDD Holdings Inc. (NASDAQ:PDD) share price. It's 526% higher than it was five years ago. This just goes to show the value creation that some businesses can achieve. In more good news, the share price has risen 19% in thirty days. This could be related to the recent financial results that were recently released - you could check the most recent data by reading our company report. We love happy stories like this one. The company should be really proud of that performance!
The past week has proven to be lucrative for PDD Holdings investors, so let's see if fundamentals drove the company's five-year performance.
View our latest analysis for PDD Holdings
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the five years of share price growth, PDD Holdings moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We know that PDD Holdings has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at PDD Holdings' financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that PDD Holdings shareholders have received a total shareholder return of 122% over one year. That's better than the annualised return of 44% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for PDD Holdings that you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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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.
