In summary, JD.com would have been worth investing in as a business, if the company had limited exposure to regulatory & policy risks which is unfortunately not the case. Separately, China is also placing a greater emphasis on data security, as evidenced by the recent cybersecurity review that newly-listed ride-hailing firm DiDi Global (DIDI) was subject to. Many of the Chinese technology firms are quite reliant on revenue from advertising which involves the extensive collection & analysis of user data.
Since October 2021, SA authors have rated JD stock as a ‘Buy’ or ‘Strong Buy’. The consensus rating by Wall Street analysts is ‘Strong Buy’, the same for the quant rating for JD. The new everyday low-price strategy, reorganization, and restructuring of the first-party business in 2022 will lead to weak growth in the medium term. American depositary receipts (ADRs) of JD.com advanced over 7% in early trading Wednesday after the Chinese e-commerce firm posted better-than-expected results as it attracted customers with lower pri…
- 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.
- However, as Cathie Wood suggested, the current value framework for Chinese names has shifted with the crackdown.
- © ۲۰۲۴ Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.
- It is apparent that investors are positive on JD.com’s recent financial performance in the second quarter of this year.
- Their collective efforts have contributed to the company’s success and its ability to stay ahead in the competitive market.
China’s growth has stagnated following its harsh Covid-19 lockdowns, a real estate crisis, rising debt, and rising tensions with the U.S. Given recent geopolitical turmoil, some rightly fear investing in U.S.-listed Chinese stocks at all, given the risks of an eventual conflict. And of course, JD also faces some intense competition within China from strong rival e-commerce platforms Alibaba and Pinduoduo.
JD.com’s strong logistics network provides a competitive edge compared to its peers, enabling faster and more reliable deliveries. Its strategic partnerships with leading companies have also expanded its market positioning. Analysts polled by LSEG expected a profit of $3.51 per share, but it wasn’t clear if that estimate was comparable. Oil prices fell Tuesday as the U.S dollar grew stronger after a Federal Reserve official indicated the central bank may not cut rates as aggressively as the market expects.
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Multiple factors, including financial performance, market sentiment, and overall economic conditions, have influenced JD.com’s recent stock performance. Positive earnings reports and strategic announcements have typically led to stock price appreciation, whereas unexpected challenges or external factors may result in short-term fluctuations. It’s essential to consider the stock’s performance in the context of the broader market and the e-commerce industry to make well-informed investment decisions. Investment firm Jefferies cut its price target on JD.com (JD) to $80 from $97, noting that revenue growth is likely to remain flat in the coming quarter. JD.com has not yet scheduled third-quarter earnings results but a consensus of analysts expect the company to earn 81 cents per share on $34.74B in revenue. But as I stressed in this article, JD.com’s future net profit margins are going to be heavily influenced by new policies & regulations in China.
IPO activity reached its lowest level in 2023, after 2016, due to interest rate hikes and broader economic uncertainty. Drizly, which grew to become the nation’s largest online marketplace for alcohol during the pandemic-fueled home delivery sales boom, will officially shut down at the end of March 2024, Uber said. Uber has decided to shut down alcohol delivery service Drizly, which it bought three years ago for $1.1 billion, Axios reported on Monday.
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In contrast, JD only derived 7% of its Q revenue from marketplace & marketing services. This suggests that any new laws or regulations governing data collection & usage in China will not have a major impact on JD.com’s overall sales. Certain investor fears about investing in Chinese stocks appear to be unfounded based on recent developments. Indeed, American financial institutions still clamor for China’s lucrative market, defying Washington’s political rhetoric and posturing. A Bloomberg article titled Wall Street Loves China More Than Ever sums up succinctly the position of U.S. banks and money managers. This bodes well for investor sentiment towards Chinese internet stocks like JD.
Over the same period, JD’s non-GAAP adjusted net profit attributable to shareholders declined by -22% YoY from RMB5,911 million to RMB4,627 million. But JD’s bottom line still exceeded the market consensus’ quarterly non-GAAP earnings estimate by +31% according to S&P Capital IQ. Today, the company received yet another negative news item, as a Wall Street bank lowered its price target on shares, along with the company’s revenue-growth outlook. However, that same analyst also has a price target well above where shares trade today even after the downgrade.
With a mission to provide customers with a convenient and reliable shopping experience, JD.com has built a robust logistics network to facilitate fast and efficient deliveries. The company has also heavily invested in advanced technologies like AI, big data, and cloud computing to enhance its operations and provide innovative solutions to its customers. Shares of Tesla shed 2.3% in avatrade review pre-market trade, after company CEO Elon Musk on Monday said he wants to assume roughly 25% of voting control over his electric vehicle business. Shares of Morgan Stanley were up more than 1% in the premarket after the investment bank posted its fourth-quarter results. To be sure, there was some good news out of the Empire survey, particularly in the six-month outlook portion.
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Instead of the 12 months typically required for international brands to begin selling in China, JD’s streamlined channel will allow Shopify brands to do so in 3-4 weeks. JD’s ‘Strong Buy’ quant rating came despite scoring D+ for valuation. Its C+ grade for growth is also a deterioration from three months ago. JD’s stock momentum earns a lackluster B- grade but it does have two other A-rated factor grades though – profitability and revisions.
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This means that JD’s future earnings estimates and forward P/E multiples might be potentially “inflated”, if the company delivers lower-than-expected profit margins in the future to be in compliance with Chinese regulations and policies. JD has lowered prices and offered discounts this year to try to boost sales following mixed performance in the wake of the pandemic. The China-based e-commerce giant turned in stronger-than-expected revenue growth last quarter and e-commerce sales growth is expected to improve gradually throughout 2024. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. 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.
JD’s new businesses segment (which includes its cloud, fintech, and healthcare units) and its stake in the online grocer Dada also continue to bleed red ink, but it narrowed most of those losses over the past year. Upgrade to MarketBeat All Access to add more stocks to your watchlist. Sign-up to receive the latest news and ratings for JD.com and its competitors with MarketBeat’s FREE daily newsletter.
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But it would probably also take a thawing of U.S. and China relations to really give JD.com and other Chinese stocks a significant boost. Investors should be aware of https://forex-review.net/ the significant risks with investing in Chinese stocks. The authoritarian state and its regulators can impose sweeping restrictions, fines or bans on major companies.
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“In many previous cycles … the cut rates reactively and did so quickly and often by large amounts. This cycle, however, … I see no reason to move as quickly or cut as rapidly as in the past.” Advanced Micro Devices helped pull the sector into positive territory with a rally of more than 7%. Western Digital was the next biggest gain with a 4% advance, followed by Cadence Design Systems at 3% higher. Oil major Shell has halted transit through the Red Sea amid fears about attacks by Houthi militants on commercial vessels in the waterway, The Wall Street Journal reported. The U.S. dollar index rose nearly 1% after Federal Reserve Governor Christopher Waller said interest rates “should be lowered methodically and carefully” when the time is right. Boeing was a sizable contributor to that slide, tumbling more than 8%.
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