Financial Contrast: Vipshop (NYSE:VIPS) & PDD (NASDAQ:PDD)

Vipshop (NYSE:VIPS) and PDD (NASDAQ:PDD) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Institutional and Insider Ownership

48.8% of Vipshop shares are owned by institutional investors. Comparatively, 39.8% of PDD shares are owned by institutional investors. 29.5% of Vipshop shares are owned by company insiders. Comparatively, 3.7% of PDD shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Vipshop and PDD’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vipshop	9.88%	12.63%	7.09%
PDD	20.73%	22.29%	14.68%

Analyst Recommendations

This is a summary of current ratings and target prices for Vipshop and PDD, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vipshop	2	4	3	1	2.30
PDD	2	9	5	0	2.19

Vipshop presently has a consensus target price of $17.16, suggesting a potential upside of 30.10%. PDD has a consensus target price of $110.31, suggesting a potential upside of 33.84%. Given PDD’s higher probable upside, analysts clearly believe PDD is more favorable than Vipshop.

Risk & Volatility

Vipshop has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, PDD has a beta of -0.05, indicating that its stock price is 105% less volatile than the S&P 500.

Earnings & Valuation

This table compares Vipshop and PDD”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vipshop	$15.15 billion	0.42	$1.04 billion	$3.02	4.37
PDD	$61.75 billion	1.90	$13.99 billion	$9.08	9.08

PDD has higher revenue and earnings than Vipshop. Vipshop is trading at a lower price-to-earnings ratio than PDD, indicating that it is currently the more affordable of the two stocks.

Summary

PDD beats Vipshop on 10 of the 15 factors compared between the two stocks.

About Vipshop

Vipshop Holdings Limited operates online platforms in the People's Republic of China. It operates in Vip.com, Shan Shan Outlets, and Others segments. The company offers womenswear, menswear, sportswear and sporting goods, shoes and bags, accessories, baby and children products, skincare and cosmetics, home goods and other lifestyle products, and supermarket products. It also provides internet finance services, including consumer and supplier financing. In addition, the company engages in warehousing, retail business, product procurement, and software development and information technology support activities. The company provides branded products through its vip.com and vipshop.com online platforms, as well as through retail stores. Vipshop Holdings Limited was founded in 2008 and is headquartered in Guangzhou, the People's Republic of China.

About PDD

PDD Holdings Inc., a multinational commerce group, owns and operates a portfolio of businesses. It operates Pinduoduo, an e-commerce platform that offers products in various categories, including agricultural produce, apparel, shoes, bags, mother and childcare products, food and beverage, electronic appliances, furniture and household goods, cosmetics and other personal care, sports and fitness items and auto accessories; and Temu, an online marketplace. It focuses on bringing businesses and people into the digital economy. The company was formerly known as Pinduoduo Inc. and changed its name to PDD Holdings Inc. in February 2023. The company was incorporated in 2015 and is based in Dublin, Ireland.