JD.com (JD) recently reported earnings for its second quarter of Fiscal Year 2022. Adjusted earnings per share came in at $0.61, which beat analysts’ consensus estimate of $0.41 per JD share. In the past nine quarters, the company has beaten estimates nine times.
In addition, sales increased 5.4% year-over-year, with revenue hitting $40 billion. The increase in sales was attributed to the growth in JD’s Retail and Logistics segments.
A good sign is that cost of revenues increased by 4.3%, which means that the company demonstrated operating leverage since it increased less than revenue growth. Indeed, the gross margin expanded from 12.5% to 13.4%. This, along with minimal changes to operating expenses, caused the company’s operating income to increase from $44.9 million in the comparable period to $561 million now.
JD Stock Has Negative Investor Sentiment
The sentiment among TipRanks investors is currently negative. Out of the 557,268 portfolios tracked by TipRanks, 1% hold JD. In addition, the average portfolio weighting allocated towards JD among those who do have a position is 4.03%. This suggests that investors of the company are fairly confident about its future.
However, in the last 30 days, 1.1% of those holding the stock decreased their positions. As a result, the stock’s sentiment is below the sector average, as demonstrated in the following image:
What is the Target Price for JD Stock?
JD.com has a Strong Buy consensus rating based on six Buys assigned in the past three months. The average JD stock price target of $85.83 implies 51.6% upside potential.
Takeaway – JD Stock Delivered Better-than-Expected Results
JD.com saw a solid quarter as it was able to grow revenue despite the slowdown in the Chinese economy, while adjusted earnings came in better than expected. As a result of its expanding margins and increasing profits, it’ll be interesting to see if sentiment surrounding JD stock improves going forward.
