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JD.com (JD) May Disappoint in Q2 Earnings: Stock to Suffer?
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JD.com (JD - Free Report) is slated to report second-quarter 2016 results on Aug 10. Last quarter, the company posted a positive earnings surprise of 12.50%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
JD.com’s first-quarter adjusted loss of 7 cents per share was lower than the Zacks Consensus Estimate of a loss of 8 cents. However, revenues of RMB 54.0 billion surged 47.3% year over year. This was mainly attributed to growth in active user accounts and that 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 many international brands like Nike Inc., Apple Inc. and Adidas, primarily because of its good market reputation.
Management expects second-quarter net revenue growth between 40% and 44% on a year-over-year basis.
However, higher operating expenses and increasing competition from Alibaba and other players could weigh on 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: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 7 cents. Hence, the two’s difference – which is Zacks ESP – is 0.00%.
Zacks Rank: JD.com carries a Zacks Rank #4 (Sell).
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.
Here are some companies which you may consider instead as our model shows they have the right combination of elements to beat on earnings this quarter:
Inter Parfums Inc. (IPAR - Free Report) , with an Earnings ESP of +5.26% and a Zacks Rank #1. The company is slated to report second-quarter 2016 earnings results on Aug 9, 2016.
Ryerson Holding Corporation (RYI - Free Report) , with an Earnings ESP of +8.70% and a Zacks Rank #1. The company is slated to report second-quarter 2016 earnings results on Aug 10, 2016.
The J. M. Smucker Company (SJM - Free Report) , with an Earnings ESP of +4.07% and a Zacks Rank #1. The company is slated to report first-quarter fiscal 2017 earnings results on Aug 23, 2016.
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JD.com (JD) May Disappoint in Q2 Earnings: Stock to Suffer?
JD.com (JD - Free Report) is slated to report second-quarter 2016 results on Aug 10. Last quarter, the company posted a positive earnings surprise of 12.50%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
JD.com’s first-quarter adjusted loss of 7 cents per share was lower than the Zacks Consensus Estimate of a loss of 8 cents. However, revenues of RMB 54.0 billion surged 47.3% year over year. This was mainly attributed to growth in active user accounts and that 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 many international brands like Nike Inc., Apple Inc. and Adidas, primarily because of its good market reputation.
Management expects second-quarter net revenue growth between 40% and 44% on a year-over-year basis.
However, higher operating expenses and increasing competition from Alibaba and other players could weigh on 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: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 7 cents. Hence, the two’s difference – which is Zacks ESP – is 0.00%.
Zacks Rank: JD.com carries a Zacks Rank #4 (Sell).
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-ADR Price and EPS Surprise
JD.COM INC-ADR Price and EPS Surprise | JD.COM INC-ADR Quote
Stocks to Consider
Here are some companies which you may consider instead as our model shows they have the right combination of elements to beat on earnings this quarter:
Inter Parfums Inc. (IPAR - Free Report) , with an Earnings ESP of +5.26% and a Zacks Rank #1. The company is slated to report second-quarter 2016 earnings results on Aug 9, 2016.
Ryerson Holding Corporation (RYI - Free Report) , with an Earnings ESP of +8.70% and a Zacks Rank #1. The company is slated to report second-quarter 2016 earnings results on Aug 10, 2016.
The J. M. Smucker Company (SJM - Free Report) , with an Earnings ESP of +4.07% and a Zacks Rank #1. The company is slated to report first-quarter fiscal 2017 earnings results on Aug 23, 2016.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>