$PDD Holdings Inc(PDD)$ The big differences in P/S ratios between PDD, $Alibaba(BABA)$ $BABA-W(09988)$ , and $JD.com(JD)$ $JD-SW(09618)$ come down to how profitable they are. PDD's operating margin is double Alibaba’s and nine times JD’s. The more profitable a company, the higher its P/S ratio tends to be because more of its sales turn into actual earnings, which pushes up its stock price. Better to use metrics like P/E, P/OCF, or P/FCF. The current differences in valuation make sense unless you think those margins are going to even out in the future.
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