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Can JD.com's (JD) Stock Surprise Investors in Q4 Earnings?

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JD.com (JD - Free Report) is slated to report fourth-quarter 2016 results on Mar 2. Last quarter, the company posted a negative earnings surprise of 66.7%.

Let’s see how things are shaping up for this announcement.

In the past one year, shares of JD.com underperformed the Zacks categorized Electronic Commerce industry. While the industry gained 43.96%, the stock returned 17.74%.

Factors to Consider

JD.com’s third-quarter adjusted loss of 10 cents per share was greater than the Zacks Consensus Estimate of a loss of 6 cents. However, revenues of RMB 60.7 billion surged 38% year over year. This was mainly attributed to the growth in active user accounts and in the number of fulfilled orders.

JD.com consistently invests to ensure long-term growth, increase brand awareness, broaden product offerings, enhance services offered to sellers on its marketplace platform and expand fulfillment capability. These should strengthen the company’s position and drive results in the to-be-reported quarter.

JD.com is currently gaining popularity among several international brands like Nike Inc., Apple Inc. and Adidas, primarily because of its good market reputation.

Management expects fourth-quarter net revenue growth between 37% and 42% on a year-over-year basis.

However, higher operating expenses and increasing competition from Alibaba and other players could weigh on the company’s results.

Earnings Whispers

Our proven model does not conclusively show that JD.com will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The stock has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: JD.com carries a Zacks Rank #3. We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

JD.com, Inc. Price and EPS Surprise

 

JD.com, Inc. Price and EPS Surprise | JD.com, Inc. Quote

Stocks to Consider

Eclipse Resources Corporation with an Earnings ESP of +14.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis, Inc (EXLS - Free Report) with an Earnings ESP of +3.85% and a Zacks Rank #2.

Cheniere Energy, Inc. (LNG - Free Report) with an Earnings ESP of +3.23% and a Zacks Rank #2.

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