FINWIRES · TerminalLIVE
FINWIRES

Research Alert: Pdd: Q1 Profits Miss Amid Strategic Investments; Volatile Earnings To Persist

By

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

PDD's Q1 2026 EPADS declined 15% Y/Y to CNY8.48, weaker than expected, while revenue growth sustained at 11% Y/Y (Q4 2025: +12%), supported by transaction services revenue (+20% Y/Y). Operating margin improved to 18.4% from Q1 2025's 16.8%, though softer than Q4 2025 (-4.0%-pts Q/Q) amid significant supply chain and first-party business investments, with product launches expected in Q3 2026. We expect margin pressures ahead as PDD committed to invest CNY100B over three years in the first-party business initiative. Management emphasized Q1 2026 marks the start of deep transformations, with Co-CEO highlighting supply chain investments as core strategic priority for the next decade. PDD's stance that long-term value creation will take precedence over near-term profits remains unchanged, in our view. We expect revenue growth to remain moderate due to initiatives such as the CNY100B merchant support program, while earnings are likely to remain volatile amid continued investments.

Related Articles

Research

Research Alert: CFRA Keeps Buy Rating On Shares Of Eli Lilly And Company

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We raise our target to $1,255 from $1,225, 28.9x our 2027 EPS view, below LLY's five-year historical forward P/E average. We lift our 2026 EPS to $37.03 from $36.97 and raise our 2027 EPS to $43.42 from $42.22. We think LLY's continuous focus on external innovation to diversify its pipeline remains a key differentiator versus peers. LLY announced three vaccine deals today as part of a strategic push into infectious disease prevention. LLY is acquiring Curevo for up to $1.5B, gaining access to amezosvatein, a next-gen shingles vaccine that demonstrated comparable efficacy to the current standard while reducing side effects in Phase 2 trials. LLY is also acquiring LimmaTech Biologics for up to $780M, bringing a bacterial vaccine platform targeting antimicrobial-resistant pathogens. LLY is also acquiring Vaccine Company for up to $1.55B, adding an in vivo nanoparticle tech platform and a Phase 1-ready Epstein-Barr Virus vaccine candidate addressing a pathogen linked to multiple sclerosis and certain cancers.

$LLY
Research

Research Alert: Zs: Q3 Results Beat On Strong Arr Momentum, Though Guidance Was Mixed

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:ZS delivered strong Q3 FY 26 results, with non-GAAP EPS of $1.08 beating consensus by $0.07, while revenue of $850.5M grew 25% Y/Y, exceeding Street expectations by $14.8M. This marks consistent execution, with revenue growth maintaining the 25% level from Q2, demonstrating sustained business momentum across the platform. ARR growth remained solid at 25% Y/Y to $3.525B, with organic growth of 21% excluding the Red Canary acquisition contribution. The sequential improvement in net new ARR and record operating margin expansion to 23% reflect stronger demand and improved execution, in our view. Management raised full-year revenue guidance to $3.3295B-$3.3325B (24.6%-24.7% growth) and non-GAAP EPS guidance to $4.10-$4.11, both above consensus estimates, and benefiting from a reduced tax rate. However, FCF margin guidance was lowered to 22.8%-23.3% from 26.5%-27.0% due to higher capex investments, though we believe continued platform expansion investments position ZS well for sustained long-term growth.

$ZS
Research

Research Alert: Smtc: Beat And Raise; Emerging Optical Play

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:SMTC posted better-than-expected Apr-Q results, with revenue of $291.0M vs. $283.5M consensus, up 6% sequentially and 16% Y/Y. Non-GAAP adjusted operating margin expanded to 20.4% from 19.0% prior year, while adjusted diluted EPS surged 34% to $0.51, beating $0.45 consensus. Strong performance was driven by robust demand across the semiconductor portfolio, particularly within the Signal Integrity segment which generated $102.0M (+39% Y/Y) with 62.7% gross margin, benefiting from data center demand for next-generation optical interconnect technologies. Jul-Q guidance exceeded expectations, seeing revenue of $328.0M and adjusted diluted EPS of $0.61, representing approximately 13% sequential revenue growth and continued margin expansion to 21.9% adjusted operating margin, vs. consensus $301M/$0.51. We see upside as FiberEdge and CopperEdge 1.6T revenues will layer onto the existing growth base, with SMTC expecting data center growth to accelerate throughout the year.

$SMTC