Shares of Dingdong (Cayman) Limited (DDL) surged 11.09% in pre-market trading on Thursday, March 6th. The rally came after the Chinese online grocery company announced a share repurchase program and reported better-than-expected fourth quarter earnings.

The company's board approved a plan to buy back up to $20 million worth of its shares until March 2026. Share buybacks are typically viewed as a positive signal by investors, as they reduce the number of outstanding shares and boost earnings per share. This move suggests Dingdong's management believes the stock is undervalued and is committed to returning value to shareholders.

Additionally, Dingdong reported adjusted earnings per share of 50 fen ($0.08) for the quarter ended December 31, 2024, beating analyst estimates of 19 fen. Revenue also grew 18.3% year-over-year to CNY5.91 billion ($808.99 million), exceeding expectations of CNY5.89 billion. The strong quarterly results further fueled the stock's pre-market rally.