This is near to the trough levels in July 2021 when the Chinese government announced that the after-school tutoring industry must become non-profit, as well as in November 2018 at the height of the U.S.-China trade coinberry review tensions. At the same time, JD’s book value has risen over the years and it more than doubled from two years ago. JD’s market cap has also climbed steadily from late 2018 to early 2021, quadrupling in that period.
- However, when we look at the price-to-book value, the ratio is now around 3.2 times.
- “When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully,” he added.
- Hence, I reckon it is more fruitful to compare JD to itself over the past years.
According to data from Benzinga Pro, JD.Com has a 52-week high of $68.29 and a 52-week low of $33.17. Investment experts are also optimistic that the heavy-handed crackdown will ameliorate in 2022. Rowe Price, said in a note to clients that Beijing has “hinted it would go easier on regulating big private sector players” and that “excessive capital growth may instead be curbed through other mechanism.” We are past the peak pessimism and uncertainty like we have experienced in the two mentioned events. Thus, with JD trading at near the trough P/B ratios and far from the five-year average, it is hard to argue that JD is currently overvalued. Furthermore, Tencent’s stake in JD would fall to a mere 2.3 percent from 17 percent.
JD.com’s earnings are expected to decrease from $2.69 per share to $2.61 per share in the next year, which is a -2.97% change. Alibaba’s news that it won’t spin off its cloud unit due to expanded U.S. export controls on chips is hurting shares. U.S. securities regulators levied fines totaling more than $7 million against three China-based auditors for a variety of offenses including issuing a false audit report.
To answer the question of whether JD.com is worth investing in, it is necessary to review the company’s recently announced Q financial results, and also assess the stock’s exposure to regulatory & policy risks in China. Apart from AMZN, JD has outperformed the major international e-commerce stocks in the past year. Shopify Inc., Etsy Inc. (ETSY), Sea Limited (SE), and MercadoLibre Inc. (MELI) have seen their share prices decline 29.4 percent to 45.1 percent in the past year while JD is down 27.3 percent. As the Chinese e-commerce and retail market becomes more competitive, JD’s expansion overseas could provide a positive boost to its revenue growth.
This suggests that analysts could have been too pessimistic previously about the impact of the challenges facing JD on its business prospects. Several analysts lowered their price targets on the stock in the aftermath of the report, a reflection of the stock’s slide in recent months, competition in the Chinese e-commerce industry, and weakness in the Chinese economy. JD.com (JD -2.98%) posted its fourth-quarter earnings report on March 9. 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.
“Given the Fed’s recent pivot, subsequent decline in rate expectations, and above-trend 2024 EPS revisions, we now embrace this upside scenario as our base case,” strategist Jonathan Golub wrote in a Tuesday note. “While earnings should drive 2024 returns, falling interest rates should support incrementally higher multiples.” The firm lifted its year-end target on the S&P 500 from 4,850 to 5,150, representing 7.7% upside for the benchmark stock index from Friday’s close. The ongoing decline in crop prices is probably more of a concern because farmers’ spending on equipment tends to follow their crop income, and crop prices usually lead that.
The company has a strong growth outlook with analysts forecasting revenue growth of 27.7 percent and 22.4 percent for 2021 and 2022,
respectively. The long-term outlook for JD stock also looks positive since the retail and e-commerce market is growing rapidly. However, as Cathie Wood suggested, the current value framework for Chinese names has shifted with the crackdown. From https://forex-review.net/ a growth perspective, many Chinese names look like a bargain, including JD.com. However, regulatory uncertainty is far too much and difficult to price in. However, prior to JD’s 2Q 2021 earnings announcement in late-August, the company’s stock price fell by -18% from $75.91 as of July 22, 2021 to $62.19 as of August 19, 2021 which represented a new one-year share price low.
A mixed earnings report and weakness in China pushed the e-commerce stock lower last month.
The firm earned $247.70 billion during the quarter, compared to analyst estimates of $246.99 billion. JD.com has generated $2.11 earnings per share over the last year ($2.11 diluted earnings per share) and currently has a price-to-earnings ratio of 10.6. Earnings for JD.com are expected to decrease by -2.97% in the coming year, from $2.69 to $2.61 per share. JD.com has not formally confirmed its next earnings publication date, but the company’s estimated earnings date is Thursday, March 14th, 2024 based off prior year’s report dates.
JD.com, NIO, Other China Stocks Slump After Xi-Biden Summit, Alibaba Warning
As such, continued declines could signal a cyclical high in Deere’s revenue and earnings — something to look out for. Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. Below are the latest news stories about JDCOM INC that investors may wish to consider to help them evaluate JD as an investment opportunity. And, you’ll also discover if the current stock market trend is conducive to buying stocks, or if it’s an environment where you want to take defensive action and sell.
The overall quant rating is not an average of the factor grades listed. Rather the metrics with the strongest predictive value have a greater weight. Also, we should note that JD has its factor grade for revisions upgraded from D to A, a substantial jump in six months, and despite ongoing regulatory headwinds facing Chinese internet stocks.
Is JD Stock Overvalued? JD Stock Key Metrics
Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. 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. JD didn’t provide any precise guidance for 2023, but it previously sent a few mixed signals.
The wave of antitrust and regulatory actions by China now underway initially emerged in November 2020. That’s when China halted the planned initial public offering of Ant Group, a financial technology giant spun off from Alibaba. Economic fluctuations, supply-chain shortages, the pandemic, weak consumer demand and rising prices of raw materials have all applied pressure. Furthermore, corporate social responsibility is becoming increasingly important for companies operating in China. A recent August 24, 2021 Bloomberg article was titled as “Country Now Comes Before Profit For Companies in Xi’s China”, which clearly illustrates how Chinese companies’ priorities have to change. It is possible that JD might have to decrease its take rate for merchants to support smaller businesses run by ordinary folks in the country.
Should I Buy JD.com Stock? JD Pros and Cons Explained
The company’s net income also surged significantly, highlighting its profitability and efficient cost management strategies. Moreover, JD.com’s net profit margin substantially improved, reflecting better operational efficiency and profitability. The company’s robust EBITDA growth indicates its ability to generate significant earnings before accounting for interest, taxes, depreciation, and amortization. However, it is important to interpret these financial metrics in conjunction with the stock’s performance and other market dynamics to understand JD.com’s overall health and attractiveness of JD.com as an investment. JD.com, Inc., also known as Jingdong and Joybuy, is a Chinese e-commerce company headquartered in Beijing. Founded on June 18, 1998, by Qiangdong Liu, JD.com started as an online magneto-optical store but quickly diversified its product offerings to include electronics, mobile phones, computers, and other consumer goods.
Raso’s concern is that slowing production levels in South America will lead to lower sales volumes in key markets like Brazil. Clearly, the difference between the analysts’ price target and today’s market price has to do with the multiple investors are willing to pay. He is the author of the investing group Asia Value & Moat Stocks, providing ideas for value investors seeking investment opportunities listed in Asia, with a particular focus on the Hong Kong market.
The Dow Jones Industrial Average fell Tuesday as bond yields ticked higher and Wall Street pored through the latest batch of fourth-quarter earnings. Evercore ISO (EVR 1.26%) analyst David Raso cut his price target to $424 from $456 and downgraded the stock to in-line from outperform. Based on the opportunities, growth, and margin considerations, JD.com looks like a good stock to own. However, as the narrative for Chinese stocks has shifted, it’s difficult to say how soon things will get better. According to many market experts, the situation might get a whole lot worse before getting any better.
Expectations for general business expectations, new orders and shipments all improved from December. The stock has been under added pressure since being downgraded by both Piper Sandler and Barclays earlier in January. Both firms cited concern over the company’s sales growth moving forward.
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