JD com, Inc. JD Stock Falls Amid Market Uptick: What Investors Need to Know February 29, 2024

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  • JD com, Inc. JD Stock Falls Amid Market Uptick: What Investors Need to Know February 29, 2024
DateMay 24, 2023

what is going on with jd stock

Shares of JD.com (JD -0.83%) fell 4.1% on Tuesday, following reports that the Chinese e-commerce leader is mulling whether to make a bid to acquire British electronics retailer Currys. The move would spark a potential bidding war with U.S.-based activist investor Elliott Advisors. JD didn’t provide any guidance for the second quarter, but analysts expect its revenue to rise just 10% year over year. For the full year, analysts expect its revenue to increase 16% — compared to its 28% growth in 2021. By comparison, Alibaba is expected to grow its revenue by 19% in fiscal 2022 (which ended this March) and just 13% in fiscal 2023.

The People’s Bank of China offered commercial lenders a net 800 billion yuan ($112 billion) in one-year loans Friday—a record cash injection into the banking system through its one-year policy. Chinese stocks had a volatile day Monday despite Beijing’s stock market regulator pledging to crack down on abnormal market fluctuations. NEW YORK (AP) — Shares are mixed in Asia, where Chinese markets advanced after a government investment fund said it would step up stock purchases. One of Europe’s largest consumer electronics groups looks set to find itself in the middle of a bidding war after Chinese online giant JD.com confirmed that it could make a takeover offer for U.K.-bas… Amidst multiple years of market losses in China, geopolitical tensions, and a prolonged property crisis, some U.S. asset managers remain undeterred, seeing potential in Chinese stocks.

what is going on with jd stock

Also, the Chinese government’s decision to lower interest rates by 25bps in February 2024 may help revive the property market. Beyond monetary policies, the Chinese government is also seeking to launch policies that encourage the upgrade or trade-ins of old autos and home appliances by providing subsidies to boost auto and appliance sales. Manika Premsingh is a macroeconomist converting big-picture trends into actionable investment ideas.

Is JD.com Stock a Buy Now?

The last deflation cycle, occurring in 2009, was brief, lasting less than a year. Despite experiencing a deflationary period in 2019, the Hang Seng Index witnessed an annual growth of 52%. This growth suggests the potential for economic stimulation through targeted measures, including interest rate reductions and specific consumer goods subsidies. Examples of such subsidies include programs for trading in appliances or autos.

what is going on with jd stock

Moreover, JD.com’s net profit margin substantially improved, reflecting better operational efficiency and profitability. The company’s robust EBITDA growth indicates its ability to generate significant earnings before accounting for interest, taxes, depreciation, and amortization. Multiple factors, including financial performance, market sentiment, and overall economic conditions, have influenced JD.com’s recent stock performance. Positive earnings reports and strategic announcements have typically led to stock price appreciation, whereas unexpected challenges or external factors may result in short-term fluctuations. It’s essential to consider the stock’s performance in the context of the broader market and the e-commerce industry to make well-informed investment decisions. JD.com, Inc., also known as Jingdong and Joybuy, is a Chinese e-commerce company headquartered in Beijing.

Chinese crackdown and JD.com

This market is already tough for most tech stocks, and JD still faces too many near-term headwinds to be considered a worthwhile investment. JD usually generates strong growth during the second quarter, which includes its annual 618 Grand Promotion sale (which marks the anniversary of the company’s founding on June 18). In its second-quarter earnings report, JD.com reported continued sluggishness, and the stock fell 3% on the news even as it topped estimates.

Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. Click the link below and we’ll send you MarketBeat’s list of seven stocks and why their long-term outlooks are very promising.

  1. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate.
  2. Some shareowners in markets outside of China, however, may receive cash in lieu of shares.
  3. Chinese stocks had a volatile day Monday despite Beijing’s stock market regulator pledging to crack down on abnormal market fluctuations.
  4. Its adjusted net income grew 64% to 28.2 billion yuan ($4.1 billion), or $0.70 per ADS, and cleared the consensus forecast by $0.20.

Despite this, food and beverages-a category where JD holds a considerable market share-continue to see robust growth. It generates most of its sales through its first-party marketplace, but it’s gradually expanding its third-party marketplace to boost its margins. JD serves fewer online shoppers than Alibaba and Pinduoduo — which both pepperstone forex operate third-party marketplaces — but its core first-party marketplace enables it to generate higher revenue per customer. JD.com’s leadership team is led by its Founder and Chairman, Mr. Qiangdong Liu. Under his guidance, the company has experienced tremendous growth and has become a prominent player in the e-commerce industry.

To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system. Shares of the company have appreciated by 1.15% over the course of the past month, outperforming the Retail-Wholesale sector’s gain of 0.38% and lagging the S&P 500’s gain of 3.85%. That said, the company’s recognition itrader review of the challenges and steps to meet them offer some hope of better times for now. It has changes coming which might just turn it around and after seeing the stock decline for the past year, its market multiples look attractive. However, it’s worth mentioning that retail sales grew by 7.2% in 2023, which isn’t too bad (see Point 4 of the link).

Financial Performance

Shares of Chinese e-commerce company JD.com Inc JD are moving lower Thursday despite reporting better-than-expected quarterly results. The company noted that it plans to focus on lowering costs and increasing efficiency as it sees challenges ahead. In the first quarter, JD Retail’s operating income rose 8% year over year to 7.89 billion yuan ($1.25 billion) as JD Logistics’ operating loss narrowed from 1.47 billion to 661 million yuan ($104 million).

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However, revenue at the core JD retail business increased just 5% in the quarter, a reflection of the broader weakness in China. Sales of general merchandise, which includes groceries, were down 10% to $11.2 billion. The deflation cycle’s impact on growth may be temporary, potentially mitigated by government monetary and fiscal policies, as well as JD’s global expansion.

On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. JD’s Monthly Active Users (MAU) data reveals a healthy growth trend, with a 3.8% YoY increase to 521 million in October, according to Moonfox. This rate, although lower than that of Ctrip (TCOM) or NetEase (NTES), yet higher than PDD’s, indicates healthy growth under the current economic climate. It also plans to invest $1.5 billion in a new subsidiary that will focus on selling cheaper products — which suggests it’s struggling to keep pace with Pinduoduo in China’s lower-end market. However, China’s entire e-commerce sector could still heat up again this year as China ends its zero-COVID policies and the macro environment stabilizes.

The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. The Internet – Commerce industry had an average PEG ratio of 0.57 as trading concluded paxful review yesterday. Hartford Fund’s recent research on Growth vs. Value investment style performance (Russell Growth 1000 minus Russell Value 1000), shows that the market currently is rewarding growth style over value.

The stock should eventually hit a bottom, but it’s likely to fall further if more downbeat economic news on China comes out. Moreover, after Tencent slashes its stake in JD.com, it will benefit far less from the online retailer’s future success. That will give Tencent less of an incentive to partner with JD.com — and perhaps drive it to compete more aggressively in areas where the two companies overlap. These shares represent roughly 15% of JD.com’s outstanding stock and 86% of Tencent’s holdings in the company.

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