Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or “retains”, and how easymarkets review effectively it does so, we are then able to assess a company’s earnings growth potential. 14 equities research analysts have issued 12 month target prices for JD.com’s stock.
- JD.com, Inc., also known as Jingdong and Joybuy, is a Chinese e-commerce company headquartered in Beijing.
- The consensus among Wall Street equities research analysts is that investors should “moderate buy” JD shares.
- China stopped releasing a key data point on youth unemployment, sparking concerns that the situation was worse than it appeared.
- The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
- As you can see from the chart below, the stock slumped through most of the first half of the month before stabilizing in the second half.
342 employees have rated JD.com Chief Executive Officer Peter Cowgill on Glassdoor.com. Peter Cowgill has an approval rating of 62% among the company’s employees. This puts Peter Cowgill in the bottom 25% of approval ratings compared to other CEOs of publicly-traded companies. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. That being said, if things don’t improve in China’s relationship with the rest of the world, these stocks could be stuck for a while.
JD.com MarketRank™ Stock Analysis
After paying a larger special dividend in 2022, it has paid a regular annual dividend each of the last two years. However, JD’s first-party marketplace takes on its own inventories and operates at much lower margins than Alibaba and Pinduoduo, which don’t take on any inventories for their third-party marketplaces. JD offsets some of that pressure by providing its own logistics services, which were expanded by years of big investments, to external customers. New consumer spending data from China may have also helped boost confidence in JD stock. Retail sales rose 7.6% in October compared with the same period last year, according to new numbers from China’s National Bureau of Statistics. That marked an improvement from September’s 5.5% year-over-year growth.
Having said that, looking at the current analyst estimates, we found that the company’s earnings are expected to gain momentum. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. 14 Wall Street equities research analysts have issued “buy,” “hold,” and “sell” ratings for JD.com in the last twelve months. There are currently 6 hold ratings, 7 buy ratings and 1 strong buy rating for the stock. The consensus among Wall Street equities research analysts is that investors should “moderate buy” JD shares.
JD.com May Bid for This Retail Group. Why It Went Shopping Outside China.
However, China’s entire e-commerce sector could still heat up again this year as China ends its zero-COVID policies and the macro environment stabilizes. JD is among China’s largest e-commerce companies, competing with Alibaba (BABA) and PDD Holdings (PDD). Unless circumstances start to improve broadly, Chinese consumer-facing companies may start to feel significant pressure. As such, investors should approach JD stock with vigilance and caution moving forward. Tencent said that it typically invests in early stage companies that can use its “patient” capital to fund their expansion. It then seeks to divest those investments when these companies “become consistently capable of self-financing their future initiatives.” Tencent’s board of directors believes JD.com is currently in this latter category.
JD.com operates through various business segments, including JD Retail, JD Logistics, JD Technology, JD Health, and JD Digits. The company’s core business, JD Retail, offers an extensive range of products through its online retail platform, known for its authentic low prices, quality assurance, and customer-centric approach. It’s important for an investor to know whether the market has priced in the company’s expected earnings growth (or decline). Doing so will help them establish if the stock’s future looks promising or ominous.
The Chinese e-commerce giant’s revenue rose 7% year over year to 295.4 billion yuan ($42.8 billion) and beat analysts’ estimates by $190 million. Its adjusted net income grew 64% to 28.2 billion yuan ($4.1 billion), or $0.70 per ADS, and cleared the consensus forecast by $0.20. In total, it does look like JD.com has some positive aspects to its business. Specifically, its fairly high earnings growth number, which no doubt was backed by the company’s high earnings retention. Still, the low ROE means that all that reinvestment is not reaping a lot of benefit to the investors.
The company is scheduled to release its next quarterly earnings announcement on Thursday, May 9th 2024. Alibaba, which is expected to grow much slower than JD in fiscal 2024 (which starts at the end of March), trades at 13 times next year’s earnings. Pinduoduo, which is growing faster than JD and Alibaba, trades at 26 times forward earnings.
These shares represent roughly 15% of JD.com’s outstanding stock and 86% of Tencent’s holdings in the company. JD.com, Inc. (JD) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock’s performance in the near term.
Shareholders of record on Friday, April 5th will be given a dividend of $0.74 per share on Monday, April 29th. JD.com saw a increase in short interest during the month of March. As of March 15th, there was short interest totaling 33,580,000 shares, an increase of 31.1% from the February 29th total of 25,620,000 shares. Based on an average daily volume of 15,570,000 shares, the days-to-cover ratio is presently 2.2 days. JD.com’s target market primarily includes consumers worldwide who prefer online shopping for a wide range of products, from electronics to fashion, groceries, and healthcare items. The company aims to cater to the diverse needs of its customers by offering a vast selection of products from local and international brands.
Earnings and Valuation
Compared to the Zacks Consensus Estimate of $42.56 billion, the reported revenues represent a surprise of +1.3%. China stopped releasing a key data point on youth unemployment, sparking concerns that the situation was worse than it appeared. Meanwhile, industrial output and investment were weaker than expected and aggregate demand also declined. According to data from S&P Global Market Intelligence, the stock finished down 20% in August. As you can see from the chart below, the stock slumped through most of the first half of the month before stabilizing in the second half.
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