What happened 

Shares of Pinduoduo (NASDAQ:PDD) leaped 12.7% on Friday, following a series of analyst upgrades and price target hikes.

So what

Following the Chinese social commerce platform's stronger-than-expected third-quarter financial results, Bank of America analyst Joyce Ju upgraded her rating on Pinduoduo's stock from neutral to buy and placed a $150 price target on its shares. JPMorgan analyst Alex Yao also upgraded the stock from neutral to overweight and doubled his price forecast to $160. Meanwhile, KeyBanc analyst Hans Chung reiterated his overweight rating and boosted his share price estimate from $110 to $160. 

A person points to an upwardly sloping line.

Pinduoduo stock price continued its ascent on Friday. Image source: Getty Images.

These analysts cited Pinduoduo's improving profitability, strong user growth, and massive addressable market as reasons for their optimism. In turn, they see tremendous room for continued gains in the coming years. Yao, for one, expects Pinduoduo to grow revenue by 60% and 40% in 2021 and 2022, respectively. 

Now what 

China's e-commerce industry is enormous. The Middle Kingdom's online retail sales will exceed $6.5 trillion by 2023, up from $3.5 trillion in 2019, according to eMarketer. With $215 billion gross merchandise volume -- essentially, the total amount of goods sold on its platform -- Pinduoduo has long runways for growth still ahead in this huge and fast-growing market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.