We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
JD is facing signficant headwinds with slowing EPS and revenue growth.
JD shares underperform competitors like BABA, underscoring relative price weakness.
JD's food delivery business is eating as signficant amount of cash as the company scales.
JD.com Company Overview
Based in Beijing, Zacks Rank #5 (Strong Sell) stock JD.com ((JD - Free Report) ) is one of the largest Chinese e-commerce and technology companies. Also known as Jingdong, JD.com separates itself from the competition by being an essentially vertically integrated e-commerce retailer. JD holds its own inventory, is responsible for its own logistics and deliveries, and provides its own customer service. JD is similar to Amazon ((AMZN - Free Report) ) in that it sells a wide variety of products on its e-commerce platform, including clothing, groceries, electronics, and more. Beyond e-commerce, JD also operates health, technology, real estate, and industrial segment businesses. Additionally, JD owns Ochama, a European-based retail brand with operations in the Netherlands France, and Poland.
JD Suffers from Relative Price Weakness Vs. Peers
Legendary growth investor William O’Neil once proclaimed that Wall Street’s great paradox is, “Stocks that seem too high in price and risky for most investors usually go higher and stocks that seem low and cheap often go lower.” I have largely discovered that more often than not, O’Neil’s paradox comes to fruition. That’s bad news for JD shares, which trade at $30 and are well off their all-time high of >$100. Additionally, relative price action can provide investors with valuable clues. Currently, JD shares exhibit troubling relative weakness and are -10.70% year-to-date, far underperforming top competitors like Pinduoduo ((PDD - Free Report) ) and Alibaba ((BABA - Free Report) ), which are up 27.7% and 54.4% respectively.
Image Source: Zacks Investment Research
JD: Chinese Economic and Regulatory Concerns
While the Chinese economy has staged a recovery, it still suffers from a sky-high unemployment rate, a devastated real estate market, a weak consumer, and deflationary pressures. Meanwhile, geopolitical tensions, a trade dispute with the United States, and limited room for fiscal stimulus mean that external and internal demand are likely to suffer. Beyond the economic concerns, JD investors must worry about a Chinese government that has been known to routinely crack down on its companies.
JD: Slowing Earnings Growth
JD earnings growth is declining at an alarming rate. For the current quarter, Zacks Consensus Analyst Estimates suggest that earnings growth will be -64.52%. Meanwhile, while annual revenues are expected to grow 14% in 2025, Wall Street expects full-year earnings to drop 37.09%.
Image Source: Zacks Investment Research
JD Food Delivery Business is a Headwind
JD is making an aggressive play for the Chinese food delivery market. While the number of users for the company’s Uber ((UBER - Free Report) ) Eats or DoorDash ((DASH - Free Report) ) like business has increased, the segment has produced significant losses thus far. Worse still, the company must invest significant capital maintain its reputation for fast and reliable delivery in a highly competitive market.
Bottom Line
The combination of fierce competition, a shaky Chinese economy, and costly new endeavors is pressuring JD.com’s fundamental performance.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bear of the Day: JD.com (JD)
Key Takeaways
JD.com Company Overview
Based in Beijing, Zacks Rank #5 (Strong Sell) stock JD.com ((JD - Free Report) ) is one of the largest Chinese e-commerce and technology companies. Also known as Jingdong, JD.com separates itself from the competition by being an essentially vertically integrated e-commerce retailer. JD holds its own inventory, is responsible for its own logistics and deliveries, and provides its own customer service. JD is similar to Amazon ((AMZN - Free Report) ) in that it sells a wide variety of products on its e-commerce platform, including clothing, groceries, electronics, and more. Beyond e-commerce, JD also operates health, technology, real estate, and industrial segment businesses. Additionally, JD owns Ochama, a European-based retail brand with operations in the Netherlands France, and Poland.
JD Suffers from Relative Price Weakness Vs. Peers
Legendary growth investor William O’Neil once proclaimed that Wall Street’s great paradox is, “Stocks that seem too high in price and risky for most investors usually go higher and stocks that seem low and cheap often go lower.” I have largely discovered that more often than not, O’Neil’s paradox comes to fruition. That’s bad news for JD shares, which trade at $30 and are well off their all-time high of >$100. Additionally, relative price action can provide investors with valuable clues. Currently, JD shares exhibit troubling relative weakness and are -10.70% year-to-date, far underperforming top competitors like Pinduoduo ((PDD - Free Report) ) and Alibaba ((BABA - Free Report) ), which are up 27.7% and 54.4% respectively.
Image Source: Zacks Investment Research
JD: Chinese Economic and Regulatory Concerns
While the Chinese economy has staged a recovery, it still suffers from a sky-high unemployment rate, a devastated real estate market, a weak consumer, and deflationary pressures. Meanwhile, geopolitical tensions, a trade dispute with the United States, and limited room for fiscal stimulus mean that external and internal demand are likely to suffer. Beyond the economic concerns, JD investors must worry about a Chinese government that has been known to routinely crack down on its companies.
JD: Slowing Earnings Growth
JD earnings growth is declining at an alarming rate. For the current quarter, Zacks Consensus Analyst Estimates suggest that earnings growth will be -64.52%. Meanwhile, while annual revenues are expected to grow 14% in 2025, Wall Street expects full-year earnings to drop 37.09%.
Image Source: Zacks Investment Research
JD Food Delivery Business is a Headwind
JD is making an aggressive play for the Chinese food delivery market. While the number of users for the company’s Uber ((UBER - Free Report) ) Eats or DoorDash ((DASH - Free Report) ) like business has increased, the segment has produced significant losses thus far. Worse still, the company must invest significant capital maintain its reputation for fast and reliable delivery in a highly competitive market.
Bottom Line
The combination of fierce competition, a shaky Chinese economy, and costly new endeavors is pressuring JD.com’s fundamental performance.