PDD Holdings saw its stock price crash almost 30% on Monday after the company warned of revenue pressure.
PDD – Daily Chart
The price of PDD has crashed down to the uptrend support line at $100. That will be the barrier to further losses, and some buyers must arrive.
PDD Holdings fell in early trading on Monday after the company’s Q2 results fell short of expectations. Revenue was up by 86% for the quarter that ended on June 30 to $13.36 billion, but that missed the consensus estimate by about $610 million.
Notably, the Chinese online retailer’s revenue growth rate also slowed sequentially. Revenue from online marketing was higher by 29%, while the company’s revenue from transaction services jumped by 234%. Total operating expenses at the retailer were 48% higher during the quarter, primarily driven by increased sales and marketing costs.
“Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges,” said Jun Liu, VP of Finance of PDD Holdings. “Profitability will also likely be impacted as we continue to invest resolutely,” she added.
Monday’s loss means the company’s share price is down -30.50% year-to-date. Buyers must emerge at this critical support level, or the company could see further losses. Value investors may see the recent drop in PDD as an opportunity to get into the company at a fairer price.
