Assessing DiDi Global (OTCPK:DIDI.Y) Valuation After Q2 Revenue Jump and JPMorgan’s Positive Analyst Coverage

DiDi Global (OTCPK:DIDI.Y) caught investors' attention after announcing an 11% year-over-year jump in second-quarter revenue. JPMorgan’s positive coverage soon followed, even as the company reported a net loss related to a one-time shareholder lawsuit provision.

See our latest analysis for DiDi Global.

Momentum appears to be building for DiDi Global, as the stock has delivered a 3.7% share price return over the past three months and a solid 2.7% total shareholder return over the past three years. Recent upbeat revenue news and favorable analyst commentary have likely been supporting sentiment and drawing renewed attention from investors.

If this fresh wave of optimism has you looking for what else could be gaining traction, consider taking the next step to discover fast growing stocks with high insider ownership

With the stock enjoying renewed momentum and revenue growth grabbing headlines, the key question for investors is whether DiDi Global remains undervalued at current levels, or if the market has already priced in the company’s future potential.

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

DiDi Global is trading at a price-to-sales (P/S) ratio of 1x, standing out as attractively valued compared to both its US Transportation industry peers and similar companies. With a last close price of $6.80, the market seems to be placing a lower value on DiDi’s current sales base than on its competitors.

The price-to-sales ratio compares a company’s stock price to its revenues, helping investors gauge how much they are paying for each dollar of sales. This metric is particularly useful for firms like DiDi Global, which are not yet consistently profitable, as it sidesteps earnings volatility and focuses on top-line business scale.

Notably, DiDi’s P/S of 1x is considerably below the US Transportation sector average of 1.4x, and it is well beneath its peer average of 3.7x. This deep discount suggests that the market could be underestimating DiDi’s revenue potential, especially as the company continues to show sales and momentum improvements. Relative to the estimated fair price-to-sales ratio of 1.4x, DiDi is trading at a level the market may eventually move toward if its growth forecasts play out.

Explore the SWS fair ratio for DiDi Global

Result: Price-to-Sales Ratio of 1x (UNDERVALUED)

However, persistent net losses and any regulatory changes could quickly challenge the upbeat outlook and reduce enthusiasm for DiDi Global’s rebound story.

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

Another View: SWS DCF Model Shows an Even Deeper Discount

While DiDi Global’s price-to-sales ratio already points to attractive value, our SWS DCF model goes a step further. The model estimates fair value at $11.14 per share, which is around 39% higher than the current price. That is a significant gap and raises the question of whether the market is missing something.

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out DiDi Global for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own DiDi Global Narrative

If you believe there’s more to DiDi Global’s story, or want to analyze the numbers your own way, you can easily craft your own view 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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