JD.com (JD) has delivered better-than-expected results for the second quarter of 2021 on the back of growth in revenues. Based in China, JD.com is a technology-driven E-commerce company.
Adjusted earnings per share (EPS) during the quarter stood at RMB2.90 ($0.45), ahead of analysts’ expectations of RMB2.35 ($.36). It, however, declined 17.4% from the same quarter last year.
Net revenues increased 26.2% year-on-year to RMB253.8 billion ($39.3 billion), topping analysts’ estimates of RMB249.7 billion ($38.51 billion). This growth can be attributed to a 23.3% rise in net product revenues, which contributed 86.6% to the total revenues. Net service revenues increased 49.2% to RMB34.1 billion ($5.3 billion).
The company’s annual active customer accounts climbed to 531.9 million in the second quarter from 417.4 million a year ago. (See JD.com stock charts on TipRanks)
JD.com incurred research and development expenses worth RMB3.7 billion ($0.6 billion), compared to RMB3.6 billion in the year-ago quarter. Also, fulfillment expenses, which primarily include procurement, warehousing, delivery, customer service and payment processing expenses, increased 22.5% to RMB14.6 billion ($2.3 billion).
The Chief Financial Officer of JD.com, Sandy Xu, said, “We are also encouraged by the continued diversification of our revenue streams, reflecting our open ecosystem strategy of empowering customers and business partners through JD.com’s supply chain-based technology and infrastructure.”
On August 20, Morgan Stanley analyst Eddy Wang maintained a Buy rating on the stock and lowered the price target to $78 from $89. The new price target implies 22.6% upside potential.
Consensus among analysts is a Strong Buy based on 7 Buys and 1 Sell. The average JD.com price target stands at $91.88, implying 44.4% upside potential.
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in JD.com is currently Very Positive, as the cumulative change in holdings across all 19 hedge funds that were active in the last quarter was an increase of 2.1 million shares.
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