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Should Value Investors Buy JD.com (JD) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

JD.com (JD - Free Report) is a stock many investors are watching right now. JD is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 11, which compares to its industry's average of 28.66. Over the last 12 months, JD's Forward P/E has been as high as 27.56 and as low as 10.71, with a median of 16.20.

Finally, investors should note that JD has a P/CF ratio of 14.19. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 20.08. Over the past 52 weeks, JD's P/CF has been as high as 80.88 and as low as -1,184.77, with a median of 17.31.

Zalando (ZLNDY - Free Report) may be another strong Internet - Commerce stock to add to your shortlist. ZLNDY is a # 2 (Buy) stock with a Value grade of A.

Shares of Zalando currently holds a Forward P/E ratio of 24.85, and its PEG ratio is 1.65. In comparison, its industry sports average P/E and PEG ratios of 28.66 and 0.91.

ZLNDY's price-to-earnings ratio has been as high as 133.26 and as low as 23.24, with a median of 50.20, while its PEG ratio has been as high as 14.16 and as low as 1.65, with a median of 3.36, all within the past year.

Zalando sports a P/B ratio of 3.72 as well; this compares to its industry's price-to-book ratio of 5. In the past 52 weeks, ZLNDY's P/B has been as high as 6.15, as low as 2.25, with a median of 4.18.

These are just a handful of the figures considered in JD.com and Zalando's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that JD and ZLNDY is an impressive value stock right now.


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