PDD Stock Tumbles as Quarterly Results Fall Short of Estimates

U.S.-traded shares in PDD Holdings (PDD) are plunging in premarket trading Thursday after the parent of the Temu discount marketplace posted quarterly results that fell massively short of analysts’ estimates as competition continued to eat into its operations.

Revenue for the three months to Sept. 30 rose 44.3% to 99.35 billion yuan ($13.7 billion) below the Visible Alpha consensus of 101.6 billion yuan. Third-quarter earnings per share (EPS) of 4.23 yuan also lagged estimates of 4.46 yuan.

“Our topline growth further moderated quarter-on-quarter amid intensified competition and ongoing external challenges,” PDD Vice President of Finance Jun Liu said in a statement.

Amazon Launched a New Section Last Week to take on Temu, Shein

Temu’s low-cost platform has grown rapidly to challenge e-commerce giant Amazon (AMZN), and Chinese rivals Alibaba (BABA) and JD.com (JD). But its costly expansion internationally has weighed on its profitability, while rivals are fighting back: Amazon last week launched a new section on its app to focus on items costing $20 or less to take on the Chinese platform as well as others like Shein.

Liu warned in August, when the company posted below-estimate sales, that revenue growth will be under pressure in the future as competition intensifies.

PDD’s U.S. traded shares are falling more than 8% in premarket trading and are down by about 20% this year.