Pinduoduo at the blink of a breakout to $100. What to expect in the quarter earnings

When Pinduoduo Inc. (NASDAQ:PDD) last reported earnings, the stock saw increased investor interest. As Invezz reported, the company saw a 268% increase in net income on strong consumer demand and lower costs. The situation may be similar when the company reports third-quarter earnings on November 28. The stock has been in a sustained surge ahead of the earnings.

Investors tracked by Zacks Investment Research have earmarked an EPS of $0.54 in Q3. The per-share earnings would represent a remarkable jump from $0.22 last year. The projected earnings will be slightly below the second quarter’s $1.05 per share.

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China’s Renaissance Securities global head of securities, Andy Maynard, has commented on Pinduoduo. He says the stock has been a favourite during a downturn in Q3. The analyst says the stock offers defensive qualities even as it pursues global expansion.

With a gain of nearly 50% in the month, it is easy to see why. PDD has 18% gains YTD, reflecting a stock that has been very defensive and has a high return in a depressed stock market. TipRanks rates the stock a strong buy with an average target of $86.

PDD trades on an ascending trendline to a key resistance level

PDD Stock Chart by TradingView

On the weekly chart, PDD trades at a key resistance level of $70. It is the third time the stock is testing the resistance since recovering from the May lows. The stock maintains a clear short-term uptrend, forming an ascending trendline. The RSI shows increasing momentum, and the reading remains above the midpoint.

Should you buy PDD ahead of earnings?

This article finds investing in PDD favourable after a break above $70. The quarter earnings could provide the catalyst for a breakout if they come strong. Still, the stock can be bought ahead of earnings if the price pierces through $70. The next resistance lies around $100.