PDD (NASDAQ:PDD) versus ACV Auctions (NASDAQ:ACVA) Critical Survey

PDD (NASDAQ:PDD) and ACV Auctions (NASDAQ:ACVA) are both multi-sector conglomerates companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

29.1% of PDD shares are held by institutional investors. Comparatively, 88.6% of ACV Auctions shares are held by institutional investors. 3.7% of PDD shares are held by insiders. Comparatively, 8.5% of ACV Auctions shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

PDD has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, ACV Auctions has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.

Profitability

This table compares PDD and ACV Auctions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PDD	26.93%	45.04%	24.45%
ACV Auctions	-15.28%	-13.50%	-6.50%

Analyst Recommendations

This is a summary of current recommendations and price targets for PDD and ACV Auctions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDD	0	0	9	0	3.00
ACV Auctions	0	2	10	0	2.83

PDD presently has a consensus price target of $188.33, indicating a potential upside of 30.91%. ACV Auctions has a consensus price target of $20.67, indicating a potential upside of 16.50%. Given PDD’s stronger consensus rating and higher probable upside, research analysts plainly believe PDD is more favorable than ACV Auctions.

Valuation & Earnings

This table compares PDD and ACV Auctions’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PDD	$34.88 billion	5.67	$8.45 billion	$7.55	19.05
ACV Auctions	$481.23 million	6.09	-$75.26 million	($0.48)	-36.96

PDD has higher revenue and earnings than ACV Auctions. ACV Auctions 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 ACV Auctions on 9 of the 14 factors compared between the two stocks.

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.

About ACV Auctions

ACV Auctions Inc. operates a digital marketplace that connects buyers and sellers for the online auction of wholesale vehicles. The company's marketplace platform includes digital marketplace, which connects buyers and sellers by providing online auction, which facilitates real-time transactions of wholesale vehicles; Run List for pre-filtering and pre-screening of vehicles up to 24 hours prior to an auction taking place; ACV transportation service to enable the buyers to see real-time transportation quotes and status reports of the vehicle; ACV capital, a short-term inventory financing services for buyers to purchase vehicles; and Go Green's seller assurance service for against claims related to defects in the vehicle. It also provides remarketing centers, which offers value-added services, such as vehicle reconditioning and storage for dealers and commercial partners. In addition, the company offers data services, including True360 report, which provides cosmetic and structural vehicle assessments integrated into vehicle history reports for dealer to make wholesale and retail transaction decisions on and off the marketplace; ACV market report provides transaction data and condition reports for comparable used vehicles, including pricing data from third-party sources and allows dealers to determine pricing and valuation strategies for used vehicles; and ACV MAX inventory management software enables dealers to manage their inventory and set pricing while turning vehicles. Further, it provides data and technology through inspection, such as condition reports, virtual lift solutions, apex device, and vehicle intelligence platform; and marketplace enablement, comprising MyACV application, private marketplaces, operations automation, live appraisals, and programmatic buying service. ACV Auctions Inc. was incorporated in 2014 and is headquartered in Buffalo, New York.