Envestnet (NYSE:ENV) vs. PDD (NASDAQ:PDD) Critical Analysis

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

Earnings & Valuation

This table compares Envestnet and PDD’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Envestnet	$1.27 billion	2.70	-$238.72 million	($3.56)	-17.48
PDD	$34.88 billion	5.69	$8.45 billion	$7.55	19.09

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

Risk and Volatility

Envestnet has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, PDD has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Envestnet and PDD, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Envestnet	0	3	5	0	2.63
PDD	0	0	9	0	3.00

Envestnet presently has a consensus price target of $64.14, indicating a potential upside of 3.06%. PDD has a consensus price target of $188.33, indicating a potential upside of 30.66%. Given PDD’s stronger consensus rating and higher probable upside, analysts plainly believe PDD is more favorable than Envestnet.

Insider & Institutional Ownership

29.1% of PDD shares are owned by institutional investors. 8.9% of Envestnet shares are owned by company insiders. Comparatively, 3.7% of PDD shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Envestnet	-15.33%	14.75%	5.01%
PDD	26.93%	45.04%	24.45%

Summary

PDD beats Envestnet on 12 of the 14 factors compared between the two stocks.

About Envestnet

Envestnet, Inc., through its subsidiaries, provides wealth management software and services in the United States and internationally. It operates through two segments: Envestnet Wealth Solutions and Envestnet Data & Analytics. The Envestnet Wealth Solutions segment offers Envestnet | Enterprise, an end-to-end open architecture wealth management platform, as well as offers data aggregation and reporting, data analytics, and digital advice capabilities; Envestnet | Wealth Analytics that transforms data into actionable intelligence; Envestnet | Tamarac which provides trading, rebalancing, portfolio accounting, performance reporting, and client relationship management software; and Envestnet | MoneyGuide that provides goals-based financial planning solutions to the financial services industry. This segment also provides Envestnet | Workplace Solutions which offers a suite of services for advisor-sold retirement plans; Envestnet | PMC that offer research and consulting services to assist advisors in creating investment solutions, and portfolio overlay and tax optimization services; and Envestnet | Billing Solutions which provides revenue management and hosted fee-billing solutions. The Envestnet Data & Analytics segment provides Envestnet Data & Analytics, a data aggregation, analytics, and digital experiences platform that provides clients and their account holders with data connectivity via open APIs, data enrichment, AI-based analytics, and digital experiences. It serves retail banks, credit unions, credit card providers, wealth management financial advisors and institutions, financial technology innovators, financial advisory firms, research and analyst firms, personal financial management, small business accounting, e-commerce, payment solutions providers, small business lending, and authentication customers. The company was founded in 1999 and is headquartered in Berwyn, Pennsylvania.

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.