JD - JD.com: Great Bang For The Buck

2024-07-18 13:02:08 ET

Summary

• Solid revenue growth and robust FCF profitability support an investment in JD.com.
• JD.com announced a new $3.0B stock buyback authorization earlier this year, which will allow the e-Commerce company to buy back its deeply discounted shares.
• JD.com is also free cash flow-profitable, and the company's e-Commerce business is cheap compared to rivals.

JD.com ( JD ) is a large e-Commerce company in China with a market cap of $37.0B that has recently seen exaggerated share price weakness. Investors with a long investment horizon could potentially exploit this weakness to their advantage, as JD.com is still seeing high single-digit top-line growth in its core retail business and is widely free cash flow profitable. While China has seen a sluggish recovery after COVID-19, JD.com seems to be trading at a distressed valuation: with a P/E ratio of just about 8.0X, implying an earnings yield of 12.5%, I believe the risk profile for long-term investors is widely skewed to the upside!...

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