Alibaba Group Holding Ltd ADR (BABA) is overvalued and PDD Holdings Inc ADR (PDD) is undervalued.
Against our estimates of intrinsic value, PDD trades at the wider discount: a margin of safety of +71%, against -144% for BABA.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 7.7% (average of 3 methods) values the shares at $47.61; the price of $116.31 is 144% above that value, and 81% of that value comes from beyond year five.
Leak Score 27/100 on 3 of 12 signals
Discounting its cash flows at 8.7% (average of 3 methods) values the shares at $277.47; the price of $80.35 is 71% below that value, and 78% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
| Metric | BABA | PDD |
|---|---|---|
| Verdict | Overvalued | Undervalued |
| Price | $116.31 | $80.35 |
| Intrinsic value | $47.61 | $277.47 |
| Margin of safety | -144% | +71% |
| Leak Score | 27/100 (3/12) | 100/100 (3/12) |
| Market cap | $289.1B | $114.4B |
| Revenue growth, 5 years | 6.4% | 47.5% |
| Operating margin | 4.1% | 22.2% |
| Net margin | 7.0% | 20.7% |
| Return on equity | 7.1% | 22.9% |
| Debt to equity | 0.25 | 0.01 |
| P/E | 27.4x | 8.9x |
| Forward P/E | 12.7x | 6.6x |
| P/B | 1.8x | 1.7x |
| Dividend yield | 0.9% | — |