A Look at DiDi Global (OTCPK:DIDI.Y) Valuation After JPMorgan’s Overweight Rating Spurs Focus on Profitability Strategy

JPMorgan’s latest move to initiate coverage on DiDi Global (OTCPK:DIDI.Y) with an Overweight rating definitely caught Wall Street’s eye. The bank’s analysts are taking a bullish stance, highlighting DiDi’s game plan for ramping up profitability. This includes more electric vehicles on the road, scaling back on driver and passenger subsidies, and ambitious steps toward launching robotaxis. For investors, these shifts signal more than just buzzwords; they point to tangible ways the company could boost margins and chart a path to lasting growth. Set against JPMorgan’s endorsement, DiDi Global’s share price has quietly delivered some compelling numbers. The growth story has gained traction recently, with the stock up 18% over the past month and surging 35% in the past three months. Over the past year, total returns have approached 38%. Looking further out, the three-year returns are eye-catching at over 250%. While recent momentum is strong, DiDi’s long-term journey has been far from linear, as the company has faced regulatory uncertainties and evolving competitive pressures in China. After this run, the big question is whether DiDi Global presents an undervalued growth story or if investors are already pricing in its next chapter. Is this a genuine entry point, or are expectations running ahead of reality?

Price-to-Sales Ratio of 1x: Is it justified?

DiDi Global is currently trading at a price-to-sales (P/S) ratio of 1x, which makes the stock appear attractively valued compared to both its industry and peer group averages.

The price-to-sales ratio compares a company’s market value to its revenues, providing a quick snapshot of how much investors are willing to pay for each dollar of sales. For transportation and platform-based businesses like DiDi, this metric can be especially relevant when profitability is not yet established, since it reflects growth potential relative to current sales.

With DiDi’s P/S ratio trading well below the US Transportation industry average (1.3x) and the peer average (3.6x), it suggests the market is not pricing in full growth expectations. The gap indicates that if DiDi can deliver on future earnings and margins, the stock could command a much higher valuation.

Result: Fair Value of $11.29 (UNDERVALUED)

See our latest analysis for DiDi Global.

However, slowing revenue growth and lingering net losses remain key risks that could quickly challenge the bullish view if they are not addressed decisively.

Find out about the key risks to this DiDi Global narrative.

Another View: What Does Our DCF Model Say?

While the current price-to-sales ratio suggests DiDi looks cheap, our SWS DCF model also points to undervaluation. However, this approach uses future cash flow estimates, introducing its own set of assumptions and uncertainties. Could both be missing something beneath the surface?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding DiDi Global to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own DiDi Global Narrative

If you see things differently or want to dig into the numbers yourself, it’s easy to build your own view of DiDi in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding DiDi Global.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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