JD.com has had a considerably shaky four quarters. In the same month last year, the company's stocks were priced at $32. Then, as the trade showdown between China and US worsened, investors started shying away from stocks with any sort of Chinese connection, sending JD.com's stock price to plunge over 40 percent in less than six months.
However, it looks like the Chinese direct sales company has hit a so-called modulation point on revenue. At the moment, JD.com's stocks are trading substantially lower compared to its all-time peak of about $50 a share.
In a nutshell, JD.com had a decent 2019 so far. If the company's sales in the first three months were not "legit", its performance in the next quarter was proof that its momentum is on the rise.
A more positive update is seen in the fact that the online retailer's selling power is still there since its initial public offering over 5 years ago. JD.com's primary unit, JD Retail, had robust non-GAAP income margins of 2.5 percent. With this, the company reminds stockholders that it gained from a series of one-off add-backs of nearly $261 million (1.9 billion yuan).
Nonetheless, even without these gains, the company disclosed that for the four quarters this year, it sees its non-GAAP net margin to end 2019 above its landmark level of 1.5 percent two years ago. Moreover, traders may be keeping a close tab on historical share price movements to get a clearer picture of the company share performance.
The company's earnings per share in the next 0-5 years is predicted to hit 8.77 percent whereas EPS patterns in the last 0-5 years as at 10 percent. However, JD.com's EPS spike next year is seen to reach 43 percent, while EPS growth target for the fourth quarter is pegged at 118 percent.
In terms of earnings call for long-term profit margins, JD.com is upbeat that its margins would be higher than that of Walmart. According to the company, its marketplace offering would tremendously strengthen its total net margin. Moving forward, traders should project JD.com's net margin to hit high single-digit marks.
JD.com is currently aiming for a $35.31 target price, with a return on equity (ROE) of 9.5 percent, return on assets (ROA) of 2.7 percent and return on investment (ROI) of 3.2 percent. The company traded with 20,781,470 shares late Friday, in contrast to its average daily volume of 12.98 million shares, with a relative volume of 1.6.
