Macquarie analysts have revised their price target for JD.com (JD, Financial) shares, lowering it from $35 to $31, while maintaining a Neutral rating. This adjustment comes as the firm reduces its earnings projections, anticipating significant losses from JD.com’s nascent food delivery service, projected to reach RMB 10 billion by 2025.
The second and third quarters of the year are expected to mark the peak of investment in this initiative. Despite the financial strain, JD.com is making notable strides in the market, achieving a daily order volume exceeding 10 million, which equates to 15% of Meituan's total, merely 72 days post-launch.
The firm suggests that other market analysts are likely to follow suit and revise their earnings forecasts downward for JD.com as well, reflecting the substantial investment and financial implications of the company's aggressive expansion strategy.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 37 analysts, the average target price for JD.com Inc (JD, Financial) is $53.22 with a high estimate of $68.35 and a low estimate of $35.12. The average target implies an upside of 64.37% from the current price of $32.38. More detailed estimate data can be found on the JD.com Inc (JD) Forecast page.
Based on the consensus recommendation from 38 brokerage firms, JD.com Inc's (JD, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for JD.com Inc (JD, Financial) in one year is $43.95, suggesting a upside of 35.75% from the current price of $32.375. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the JD.com Inc (JD) Summary page.
JD Key Business Developments
Release Date: March 06, 2025
- Total Revenue: RMB347 billion in Q4, up 13% year-on-year; RMB1.2 trillion for the full year 2024, up 7% year-on-year.
- Electronics and Home Appliances Revenue: Up 16% year-on-year in Q4; up 5% for the full year 2024.
- General Merchandise Revenue: Up 11% year-on-year in Q4; up 9% for the full year 2024.
- Supermarket Revenue: Double-digit year-on-year growth for both Q4 and the full year 2024.
- Service Revenue: Up 11% year-on-year in Q4; up 8% for the full year 2024.
- Gross Margin: 15.3% in Q4; 15.9% for the full year 2024, up 110 bps and 114 bps, respectively.
- Non-GAAP Net Margin: 3.3% in Q4; 4.1% for the full year 2024.
- Non-GAAP Net Profit: Increased by 34% year-on-year in Q4; 36% for the full year 2024.
- Free Cash Flow: RMB44 billion for the full year 2024.
- Cash and Cash Equivalents: RMB241 billion by the end of Q4.
- Annual Dividend: USD0.5 per ordinary share or USD1 per ADS, a 32% year-on-year increase.
- Share Repurchase: 255 million Class A ordinary shares in 2024, equivalent to 128 million ADS.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- JD.com Inc (JD, Financial) reported strong double-digit growth in Q4 2024, with revenues from electronics and home appliances increasing by 16% year-on-year.
- The company achieved a non-GAAP net margin of 4.1% for the full year 2024, reflecting steady profitability expansion.
- JD.com Inc (JD) saw robust growth in its general merchandise category, with supermarket revenues experiencing double-digit growth for four consecutive quarters.
- The company has been proactive in adopting AI and industrial robotics to enhance operational efficiency and reduce costs.
- JD.com Inc (JD) returned significant value to shareholders through an increased annual dividend and a substantial share buyback program, reflecting confidence in its long-term success.
Negative Points
- The new business segment saw a year-on-year revenue decline of 31% in Q4 2024, largely due to adjustments in the Jingxi business.
- Despite strong growth in many areas, the company faces challenges in maintaining momentum in the electronics and home appliances category due to a high base effect from government stimulus policies.
- JD.com Inc (JD) is still in the early stages of exploring on-demand retail and food delivery, which may require significant investment and could impact short-term profitability.
- The company acknowledges challenges in the macroeconomic environment, which could affect consumer sentiment and spending in the short term.
- There is a need for continued investment in fulfillment network optimization to improve profitability in the supermarket category.
