PDD Holdings reports Q1 2026 results on May 27 with options traders noticeably more defensive than they have been for most of the year.
The clearest pre-earnings signal is the put/call ratio, which has climbed to 0.70 — roughly 1.5 standard deviations above its 20-day average of 0.63. That shift is recent and sharp: through late April and into the first half of May, the PCR held in the 0.58–0.61 range before accelerating over the past two weeks. The move stops well short of the 52-week high of 1.34, so this is heightened caution rather than outright fear. Short interest adds a mild overlay to that tone — shares short have risen about 16% over the past month to roughly 29 million shares — but the borrow market itself is giving bears no encouragement. Cost to borrow is at 0.48%, essentially flat on the week, and availability is extraordinarily loose at over 1,100% of short interest, meaning there is far more stock available to borrow than there are shorts in the market. The ORTEX short score of 40, sitting in the 40th percentile, confirms this is not a heavily contested short.
The bull and bear debate on PDD is squarely a margin-versus-growth argument. Bulls point to the last quarter's revenue beat — RMB 104 billion, up 7% year-over-year — and a non-GAAP EPS figure that cleared consensus by a wide margin, with the company's group-buy model gaining share as competitors exited the space. The EV/EBITDA multiple of 3.7x and a P/E below 8x make the valuation case unusually concrete for a business of this scale; the stock's EV/EBIT factor ranks in the 97th percentile, meaning it screens cheaper than almost all peers on earnings power. Bears, however, focus on what management has repeatedly signalled: sustained investment in merchant support and ecosystem health will keep margins volatile, and limited near-term earnings guidance makes the earnings-per-share trajectory hard to model with confidence. Analyst coverage reflects that split — the most recent activity on record (Freedom Capital Markets and B of A, though both notes are from late 2025 or early 2026) reflects a mix of cautious neutrals and committed bulls with targets in the $140–$170 range, all sitting well above the current $96.64 price. Given that gap, the analyst consensus arguably prices in a meaningful recovery that the stock's own momentum has not delivered.
On price, PDD is down about 1.4% over the past month and essentially flat on the week after a 2.2% bounce on May 26. That modest recovery brings some relief, but the stock remains in laggard territory relative to correlated peers. JD is down 4.7% on the week and Sea Limited is off around 1.1%, so the broader Chinese and Southeast Asian e-commerce complex is under pressure — PDD's struggles are not entirely company-specific. The most recent comparable earnings print, in March, produced a 2.6% one-day gain and a 3.8% move over five days, suggesting the stock can respond positively to a solid beat, though that event followed a period of more uniformly bullish positioning than currently prevails.
The Q1 report is therefore a test of whether PDD's revenue growth rate is stabilising or decelerating, and whether the margin trajectory is wide enough to justify a valuation that already screens as one of the cheapest in global e-commerce.
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