Why JD com Stock Fell 20% in August The Motley Fool

The tech outlook for China appears grim, with regulatory concerns in the spotlight. Ongoing issues of data use, gaming, and antitrust policies have weighed on Alibaba, JD.com and their peers. According to data from Benzinga Pro, JD.Com has a 52-week high of $68.29 and a 52-week low of $33.17.

  1. If I had to pick a Chinese e-commerce stock right now, I’d definitely buy Pinduoduo for its stronger growth rates instead of JD.
  2. However, revenue at the core JD retail business increased just 5% in the quarter, a reflection of the broader weakness in China.
  3. “There is a herding effect in tech,” said Jeff Shulman, a professor at the University of Washington’s Foster School of Business, who follows the tech industry.
  4. The company’s key advantage lies in its expansive product range, efficient logistics infrastructure, and commitment to customer satisfaction.
  5. Despite intensified competition and restructuring impact, Citigroup analysts believe JD’s overall 6.18 performance will likely exceed their initial 2-5% yoy growth estimate.

During its “6.18” June online bargains event, an important barometer of Chinese consumer spending, the company’s sales volume surged to a record high. The new everyday low-price strategy, reorganization, and restructuring https://traderoom.info/ of the first-party business in 2022 will lead to weak growth in the medium term. Unless circumstances start to improve broadly, Chinese consumer-facing companies may start to feel significant pressure.

Alibaba, Chinese Stocks Slide as Deflation Hits Worst in 3 Years

The stock close down nearly 16% for the day after a failed attempt at a recovery rally. This pattern of decline is in keeping with its performance throughout the past month. JD.Com Inc JD shares are trading higher by naga broker 3.43% to $37.26 Wednesday morning. Shares of Chinese stocks are trading higher after Premier Li Qiang met with the heads of multiple tech companies, which has raised hopes of an end of a crackdown on the sector.

Will Beijing’s Intervention Sustain the Rally in Hong Kong Stocks?

Alongside, our most recent consensus estimate is anticipating revenue of $42.56 billion, indicating a 0.65% downward movement from the same quarter last year. “There is a herding effect in tech,” said Jeff Shulman, a professor at the University of Washington’s Foster School of Business, who follows the tech industry. “The layoffs seem to be helping their stock prices, so these companies see no reason to stop.” JD said revenue in the quarter rose 7.6% to $39.7 billion, ahead of expectations at $38.7 billion, with strong growth from the services segment, where revenue was up 30.1% to $7.5 billion. However, revenue at the core JD retail business increased just 5% in the quarter, a reflection of the broader weakness in China. Sales of general merchandise, which includes groceries, were down 10% to $11.2 billion.

The company plans to create seven listed firms with at least 100 billion yuan ($14 billion) a piece market values, Bloomberg cites in an internal letter to employees. Sign-up to receive the latest news and ratings for JD and its competitors with MarketBeat’s FREE daily newsletter. Sign up to receive the latest news and ratings for JD and its competitors with MarketBeat’s FREE daily newsletter. I personally wouldn’t buy JD until its growth either stabilizes or accelerates again. If I had to pick a Chinese e-commerce stock right now, I’d definitely buy Pinduoduo for its stronger growth rates instead of JD.

Executives justified the mass layoffs by citing a pandemic hiring binge, high inflation and weak consumer demand. On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tencent, JD Beat Q3 Expectations in China Boost

Covering analysts heading into the Q2 disclosure anticipated earnings per share (EPS) of 41 cents. 15 Wall Street research analysts have issued “buy,” “hold,” and “sell” ratings for JD.com in the last twelve months. The consensus among Wall Street research analysts is that investors should “moderate buy” JD shares. JD.com (JD -1.46%) posted its fourth-quarter earnings report on March 9.

According to 15 analysts, the average rating for JD stock is “Buy.” The 12-month stock price forecast is $42.79, which is an increase of 92.57% from the latest price. It generates most of its sales through its first-party marketplace, but it’s gradually expanding its third-party marketplace to boost its margins. JD serves fewer online shoppers than Alibaba and Pinduoduo — which both operate third-party marketplaces — but its core first-party marketplace enables it to generate higher revenue per customer. Despite its success, JD.com faces various risks and challenges that investors should consider. Intense competition from other e-commerce giants, regulatory changes, and economic uncertainties could impact the company’s performance.

Should I Buy JD.com Stock? JD Pros and Cons Explained

MarketBeat just released its list of 10 cheap stocks that have been overlooked by the market and may be seriously undervalued. The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. With respect to valuation, JD.com, Inc. is currently being traded at a Forward P/E ratio of 7.46. Its industry sports an average Forward P/E of 18.68, so one might conclude that JD.com, Inc. is trading at a discount comparatively. Some smaller tech startups are running out of cash and facing fundraising struggles with the era of easy money now over, which has prompted workforce reductions.

As such, investors should approach JD stock with vigilance and caution moving forward. 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. Since then, JD stock has decreased by 23.1% and is now trading at $22.22.

Analysts’ Consensus Price Target

On the bright side, JD Retail’s adjusted operating margin still rose 60 basis points to 3.7% for the full year as it reined in its spending and streamlined its business. In its second-quarter earnings report, JD.com reported continued sluggishness, and the stock fell 3% on the news even as it topped estimates. Analysts and investors alike will be keeping a close eye on the performance of JD.com, Inc. in its upcoming earnings disclosure. On that day, JD.com, Inc. is projected to report earnings of $0.65 per share, which would represent a year-over-year decline of 7.14%.

Those headline numbers looked solid, but JD’s stock plunged 11% after the report and remains 60% below its all-time high from February 2021. Let’s see why the bulls retreated — and if JD is a potential turnaround play for 2023. Investors of record on Thursday, April 6th will be given a dividend of $0.62 per share on Thursday, May 4th. The company is scheduled to release its next quarterly earnings announcement on Thursday, March 14th 2024.

It recently shut down its marketplaces in Indonesia and Thailand, which are both dominated by Sea Limited’s Shopee. That retreat could strengthen JD Retail’s margins but throttle its overseas growth. © 2024 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. To see all exchange delays and terms of use please see Barchart’s disclaimer. 342 employees have rated JD.com Chief Executive Officer Peter Cowgill on Glassdoor.com.

Additionally, China’s NDRC made positive comments on Alibaba and Tencent. JD.com has several growth opportunities to leverage in the dynamic e-commerce landscape. The continued growth of online shopping in China and globally presents a vast market for JD.com to capture. Expanding its product categories and reaching untapped customer segments are potential avenues for growth.