tiprankstipranks
JD.Com: Undervalued, Growing E-Commerce Empire
Stock Analysis & Ideas

JD.Com: Undervalued, Growing E-Commerce Empire

JD.Com Inc. (JD) looks attractive at current prices, and it is already generating significant profits. I am bullish on the stock.

As one of China’s leading e-commerce platforms, JD.com offers 500 million customers direct access to a variety of products from across the world. (See JD stock charts on TipRanks)

The company also helps international brands tap into China’s fast-growing market by providing comprehensive marketing support, such as professional photography services for advertising images on its site and mobile app.

JD.com’s Strengths

JD’s unparalleled nationwide logistics network, and sophisticated data-driven delivery technologies, make it possible for customers to enjoy same-day, or next-day deliveries.

The company’s asset-heavy approach has allowed it to become China’s most successful retailer, by offering a distinct mix of authentic products and high-quality customer service at competitive prices.

In 2020, JD’s net product revenue was nearly three times higher than Suning’s, the second-largest listed retailer in China.

Recent Results

In the second quarter of Fiscal Year 2021, the company’s net revenue came in at $39.3 billion, up 26.2% year-over-year.

JD.com also posted a total of $46.6 million from its operations in Q2, with non-GAAP earnings standing at an impressive $700 million. Annual active accounts from the past 12 months increased to 531.9 million. This figure stood at 417.4 million a year ago.

JD.com’s Valuation

While JD.com continues to have a lengthy growth runway, it also has a very attractive current valuation. The EV/forward revenue ratio is extremely attractive at just 0.5x, while the EV/EBITDA is a reasonable 26.6x.

Despite these valuations, JD.com is expected to see revenues surge by 28.8% in 2021, and 21.6% in 2022.

Wall Street’s Take

From Wall Street analysts, JD.com earns a Strong Buy consensus rating based on 11 Buy ratings, zero Hold ratings, and one Sell rating in the past three months. Additionally, the average JD price target of $93.67 puts the upside potential at 23.86%.

Summary and Conclusions

JD.com is enjoying rapid growth thanks to its strong presence in the dynamic and growing e-commerce industry, in the world’s most populous market. Revenue and EBITDA are expected to soar over the coming years, making the current valuation look very attractive.

Furthermore, Wall Street analysts are almost unanimously bullish on the stock and the consensus target price gives significant upside. As a result, the current valuation looks pretty attractive. The stock looks like it could be a good buy here.

Disclosure: On the date of publication, Samuel Smith had no position in any of the companies discussed in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles