JD.com (JD, Financial), a leading e-commerce giant, recently witnessed a significant increase in its food delivery operations, with order volumes skyrocketing from 5 million to 10 million in just ten days. This rapid growth highlights JD's commitment to expanding within the food delivery sector, as emphasized by Citi analyst Alicia Yap. Despite this growth, the company's stock, along with Meituan's, has seen a decline due to investor apprehensions about potential impacts on profitability.
The analyst from Citi has adjusted the price target for JD.com, reducing it from $56 to $51, yet maintained a Buy rating on the shares. Yap points out that there's still uncertainty regarding the sustained momentum in order volume. However, JD's established strengths in supply chain management and logistics make food delivery a strategic expansion, offering increased transaction frequency, potential for cross-selling, and an efficient means of acquiring new users. This sector growth could help JD overcome current investor concerns.
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 $52.93 with a high estimate of $68.12 and a low estimate of $31.00. The average target implies an upside of 62.71% from the current price of $32.53. 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 35.11% from the current price of $32.53. 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.
