JD - JD.com: A Cautious Buy On The Back Of Sentiment Recovery And The Economy

2024-06-26 02:54:54 ET

Summary

• JD.com, Inc. is trading at a cheap valuation compared to American and European e-commerce retailers, but concerns about corporate governance and Chinese economic uncertainty are weighing down the stock.
• Earnings momentum, not valuation multiples, will likely drive the stock higher, especially as consumer confidence in China gradually recovers.
• Despite strong results in the first quarter of 2024, JD's stock has declined due to concerns about future growth prospects and increasing competition in the Chinese market.

JD.com, Inc. ( JD ) is cheap compared to American and European e-commerce retailers, but corporate governance concerns as well as Chinese economic uncertainty continue weighing down the stock.

The company is currently trading at ~13% Free Cash Flow yield but has managed to double adjusted earnings over the last 3 years as revenue growth was supplemented by profit margin expansion....

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