SEA (NYSE:SE) vs. PDD (NASDAQ:PDD) Critical Contrast

PDD (NASDAQ:PDD) and SEA (NYSE:SE) are both large-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Risk & Volatility

PDD has a beta of -0.01, meaning that its share price is 101% less volatile than the S&P 500. Comparatively, SEA has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for PDD and SEA, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDD	1	10	5	0	2.25
SEA	1	2	10	1	2.79

PDD presently has a consensus price target of $113.31, suggesting a potential upside of 43.61%. SEA has a consensus price target of $149.40, suggesting a potential upside of 46.93%. Given SEA’s stronger consensus rating and higher possible upside, analysts plainly believe SEA is more favorable than PDD.

Profitability

This table compares PDD and SEA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PDD	20.73%	22.29%	14.68%
SEA	5.98%	13.54%	5.59%

Earnings & Valuation

This table compares PDD and SEA”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PDD	$61.75 billion	1.82	$13.99 billion	$9.08	8.69
SEA	$22.94 billion	2.71	$1.58 billion	$2.59	39.26

PDD has higher revenue and earnings than SEA. PDD is trading at a lower price-to-earnings ratio than SEA, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

39.8% of PDD shares are held by institutional investors. Comparatively, 59.5% of SEA shares are held by institutional investors. 3.7% of PDD shares are held by insiders. Comparatively, 0.2% of SEA shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

SEA beats PDD on 8 of the 15 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 SEA

Sea Ltd. is an internet and mobile platform company, which engages in the provision of online gaming services. It operates through the following segments: Digital Entertainment, E-Commerce, and Digital Financial Services. The Digital Entertainment segment offers and develops mobile and PC online games. The E-Commerce segment manages a third-party marketplace through the Shopee mobile app and websites that connect buyers and sellers. The Digital Financial Services segment includes a variety of payment services and loans to individuals and businesses through SeaMoney. Sea was founded by Xiao Dong Li, Gang Ye, and Jing Ye Chen on May 8, 2009 and is headquartered in Singapore.