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Can JD.com (JD) Stock Surprise Investors in Q3 Earnings?

JD VTVT KMDA FTAI

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JD.com (JD - Free Report) is slated to report third-quarter 2016 results on Nov 15. Last quarter, the company posted a positive earnings surprise of 57.1%.

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

Factors to Consider

JD.com’s second-quarter adjusted loss of 3 cents per share was lower than the Zacks Consensus Estimate of a loss of 7 cents. Also, revenues of RMB 65.2 billion surged 42.0% year over year. This was mainly attributed to 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 third-quarter net revenue growth between 34% and 38% 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: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 6 cents. Hence, the Earnings ESP is 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, which increases the power of surprise prediction. But a 0.00% ESP makes surprise prediction.

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

vTv Therapeutics Inc. (VTVT - Free Report) with an Earnings ESP of +335.0% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kamada Ltd. (KMDA - Free Report) with an Earnings ESP of +125.0% and a Zacks Rank #2.

Fortress Transportation and Infrastructure Investors LLC (FTAI - Free Report) with an Earnings ESP of +100.0% and a Zacks Rank #2.

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