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JD.com's Share Price Increases 47.7% in a Month: Should You Dive in?
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Shares of JD.com (JD - Free Report) have gained 47.7% in the past month, outperforming the Zacks Internet – Commerce industry’s growth of 8.2% and the broader retail sector’s return of 5.6%. The stock’s bullishness appears to have resulted from the latest stimulus measures announced by the People’s Bank of China to revive flagging economic growth of China.
The measures include interest rate cuts, which would reduce borrowing costs and prevent scores of debt-laden property owners. Secondly, the central bank will ease restrictions on borrowing to invest in stocks and shares on China exchanges.
Given this upbeat scenario, the question arises whether this is the right time to buy JD’s shares for a potential upside? Let us take a look at the China-based e-commerce and technology company’s fundamentals.
One-Month Price Performance
Image Source: Zacks Investment Research
JD’s Strength in E-commerce Model
JD.com benefits from solid momentum in JD Retail, driven by strength in its e-commerce business, which is comprised of online retail and marketplace e-commerce platforms.
A wide range of product categories, including electronics products, home appliances and a large variety of other general merchandise categories, are boosting customer engagement on the company’s online retail platform.
Strategic investments and a deepening focus on the innovation of products and services with the power of advanced technologies are playing a vital role in shaping the growth trajectory of the company.
Strengthening relationships with third-party merchants, who are continuously introducing products like premium international brands, are driving customer momentum on its marketplace platform.
The increasing number of flagship stores on JD’s platform is aiding the performance of the JD Retail segment. JD.com’s partnership with French luxury fashion group SMCP, whose brands like SANDRO, MAJE and CLAUDIE PIERLOT opened flagship stores on JD’s platform, is noteworthy.
JD has a strong e-commerce relationship with Walmart (WMT - Free Report) . It supports Walmart and Sam’s Club Flagship Stores on its platform and provides them with fulfillment solutions.
Strength in JD Logistics, driven by an expanding fulfillment network, is a plus for the company.
Strong Retail Strategies to Drive Prospects
JD.com’s initiative to offer better customer experience through its content-rich, user-friendly and highly personalized mobile app is a positive. JD’s relentless efforts to empower its business with advanced technologies like artificial intelligence (AI) are expected to strengthen its business prospects.
JD.com has built and operates its nationwide fulfillment infrastructure that supports its e-commerce business. Its speedy, efficient and reliable fulfillment services deliver an enhanced shopping experience.
The company’s majority-owned subsidiary, Dada, which is a local on-demand retail and delivery platform in China, in cooperation with JD Logistics, provides customers with on-demand and last-mile delivery services for a wide selection of grocery and other fresh products through JD Daojia.
JD.com’s strong omni-channel initiatives are other positives. In this regard, its strategic partnership with Dada, which has tie-ups with a large number of well-known chain retailers and many first-tier international and domestic FMCG brands, bodes well.
The company is making strides in the offline fresh food market on the back of its 7FRESH, which is part of its omni-channel strategy.
The opening of JD MALL, which is an offline store offering omni-channel shopping experiences, is noteworthy.
JD offers various digital marketing services on its e-commerce platform, including suppliers and third-party merchants. Its AI-powered digital marketing platform provides comprehensive digital branding and performance-based marketing solutions, and various effective measurement tools, which help marketers reach their target audience and attract and retain customers.
The platform also features marketing tools for online marketing message creation, targeting, bidding, deployment and budget allocation, which enable marketers to manage their digital marketing strategies and spending efficiently.
JD.com’s strength in the supply-chain field is boosting its presence in the retail industry. Its supply-chain-based technology and services manage upstream manufacturing and procurement, logistics, distribution and retail to end customers.
The company has developed robust supply-chain-based technology in three key areas, namely AI, big data analytics and cloud computing, with the help of which it built a smart supply-chain platform that includes application-level products supporting many use cases that are applicable to its business and ecosystem.
The abovementioned retail strategies position JD well to compete with the China’s e-commerce giant, Alibaba (BABA - Free Report) .
Rising Estimates Bode Well for JD
The company’s strength in the e-commerce business, omnichannel retail strategies, growing relationships with third-party merchants and supply-chain technology are expected to benefit its prospects in the long run.
The Zacks Consensus Estimate for 2024 revenues is pegged at $157.16 billion, indicating year-over-year growth of 3.3%.
The consensus mark for 2024 earnings is pegged at $3.98 per share, suggesting year-over-year growth of 27.6%. The figure has moved north by a peny over the past seven days.
Image Source: Zacks Investment Research
Attractive Valuation: A Silver Lining for JD
JD.com’s Value Score of A presents a compelling opportunity.
JD is trading at a discount with a forward 12-month Price/Sales of 0.39X compared with the industry’s 1.72X. This reflects a strong entry point for the investors.
Image Source: Zacks Investment Research
Final Take
JD.com’s growing momentum in its retail business, owing to the growing relationships with third-party merchants, digital marketing services, omni-channel efforts and logistics services, presents a potentially attractive buying opportunity for investors.
Image: Bigstock
JD.com's Share Price Increases 47.7% in a Month: Should You Dive in?
Shares of JD.com (JD - Free Report) have gained 47.7% in the past month, outperforming the Zacks Internet – Commerce industry’s growth of 8.2% and the broader retail sector’s return of 5.6%. The stock’s bullishness appears to have resulted from the latest stimulus measures announced by the People’s Bank of China to revive flagging economic growth of China.
The measures include interest rate cuts, which would reduce borrowing costs and prevent scores of debt-laden property owners. Secondly, the central bank will ease restrictions on borrowing to invest in stocks and shares on China exchanges.
Given this upbeat scenario, the question arises whether this is the right time to buy JD’s shares for a potential upside? Let us take a look at the China-based e-commerce and technology company’s fundamentals.
One-Month Price Performance
Image Source: Zacks Investment Research
JD’s Strength in E-commerce Model
JD.com benefits from solid momentum in JD Retail, driven by strength in its e-commerce business, which is comprised of online retail and marketplace e-commerce platforms.
A wide range of product categories, including electronics products, home appliances and a large variety of other general merchandise categories, are boosting customer engagement on the company’s online retail platform.
Strategic investments and a deepening focus on the innovation of products and services with the power of advanced technologies are playing a vital role in shaping the growth trajectory of the company.
Strengthening relationships with third-party merchants, who are continuously introducing products like premium international brands, are driving customer momentum on its marketplace platform.
The increasing number of flagship stores on JD’s platform is aiding the performance of the JD Retail segment. JD.com’s partnership with French luxury fashion group SMCP, whose brands like SANDRO, MAJE and CLAUDIE PIERLOT opened flagship stores on JD’s platform, is noteworthy.
JD has a strong e-commerce relationship with Walmart (WMT - Free Report) . It supports Walmart and Sam’s Club Flagship Stores on its platform and provides them with fulfillment solutions.
Strength in JD Logistics, driven by an expanding fulfillment network, is a plus for the company.
Strong Retail Strategies to Drive Prospects
JD.com’s initiative to offer better customer experience through its content-rich, user-friendly and highly personalized mobile app is a positive. JD’s relentless efforts to empower its business with advanced technologies like artificial intelligence (AI) are expected to strengthen its business prospects.
JD.com has built and operates its nationwide fulfillment infrastructure that supports its e-commerce business. Its speedy, efficient and reliable fulfillment services deliver an enhanced shopping experience.
The company’s majority-owned subsidiary, Dada, which is a local on-demand retail and delivery platform in China, in cooperation with JD Logistics, provides customers with on-demand and last-mile delivery services for a wide selection of grocery and other fresh products through JD Daojia.
JD.com’s strong omni-channel initiatives are other positives. In this regard, its strategic partnership with Dada, which has tie-ups with a large number of well-known chain retailers and many first-tier international and domestic FMCG brands, bodes well.
The company is making strides in the offline fresh food market on the back of its 7FRESH, which is part of its omni-channel strategy.
The opening of JD MALL, which is an offline store offering omni-channel shopping experiences, is noteworthy.
JD offers various digital marketing services on its e-commerce platform, including suppliers and third-party merchants. Its AI-powered digital marketing platform provides comprehensive digital branding and performance-based marketing solutions, and various effective measurement tools, which help marketers reach their target audience and attract and retain customers.
The platform also features marketing tools for online marketing message creation, targeting, bidding, deployment and budget allocation, which enable marketers to manage their digital marketing strategies and spending efficiently.
JD.com’s strength in the supply-chain field is boosting its presence in the retail industry. Its supply-chain-based technology and services manage upstream manufacturing and procurement, logistics, distribution and retail to end customers.
The company has developed robust supply-chain-based technology in three key areas, namely AI, big data analytics and cloud computing, with the help of which it built a smart supply-chain platform that includes application-level products supporting many use cases that are applicable to its business and ecosystem.
The abovementioned retail strategies position JD well to compete with the China’s e-commerce giant, Alibaba (BABA - Free Report) .
Rising Estimates Bode Well for JD
The company’s strength in the e-commerce business, omnichannel retail strategies, growing relationships with third-party merchants and supply-chain technology are expected to benefit its prospects in the long run.
The Zacks Consensus Estimate for 2024 revenues is pegged at $157.16 billion, indicating year-over-year growth of 3.3%.
The consensus mark for 2024 earnings is pegged at $3.98 per share, suggesting year-over-year growth of 27.6%. The figure has moved north by a peny over the past seven days.
Image Source: Zacks Investment Research
Attractive Valuation: A Silver Lining for JD
JD.com’s Value Score of A presents a compelling opportunity.
JD is trading at a discount with a forward 12-month Price/Sales of 0.39X compared with the industry’s 1.72X. This reflects a strong entry point for the investors.
Image Source: Zacks Investment Research
Final Take
JD.com’s growing momentum in its retail business, owing to the growing relationships with third-party merchants, digital marketing services, omni-channel efforts and logistics services, presents a potentially attractive buying opportunity for investors.
With a Zacks Rank #1 (Strong Buy) and a Growth Score of A, JD appears to offer solid investment potential. You can see the complete list of today’s Zacks #1 Rank stocks here.