On Thursday, Citi reaffirmed its Buy rating on JD.com, Inc (NASDAQ:JD) stock with a steady price target of $42.00.
The firm's analysis followed JD.com's second-quarter 2024 financial results, which showed total revenues of Rmb291.4 billion, marking a 1.2% year-over-year increase.
This figure slightly surpassed the estimates of Rmb290.3 billion by Citi and Rmb290.5 billion by consensus, by margins of 0.4% and 0.3%, respectively.
JD.com reported non-GAAP net profit of Rmb14.5 billion, translating to a net margin of 5.0% or Rmb9.36 per American Depositary Share (ADS). These profits were significantly higher than expected, exceeding Citi's and consensus estimates by 52% and 51%, which had forecasted Rmb9.55 billion and Rmb9.56 billion, respectively, both with a margin of 3.29%.
The breakdown of JD.com's revenue by segment revealed that electronic and home appliance revenues decreased by 4.6% year-over-year to Rmb145.1 billion, falling slightly short of expectations.
General merchandise revenues, however, increased by 8.7% year-over-year to Rmb88.8 billion, but also did not meet estimates by a margin of 1.1%.
Net service revenues rose by 6.3% year-over-year to Rmb57.5 billion. Within this category, marketplace and advertising revenues amounted to Rmb23.4 billion, up by 4.1% year-over-year and exceeding forecasts by 5.6%.
Logistic revenues also outperformed estimates by 3.0%, reaching Rmb34.1 billion, a 7.9% year-over-year increase. JD Retail, the company's retail segment, saw revenues climb by 1.5% year-over-year to Rmb257.1 billion.
The non-GAAP operating margin (OpM) for JD Retail before unallocated items for the second quarter of 2024 was reported at 3.9%, a rise from the 3.2% margin recorded in the same quarter of the previous year.
InvestingPro Insights
As JD.com continues to navigate the competitive e-commerce landscape, recent data from InvestingPro offers valuable insights into the company's financial health and market position. JD.com's management has been actively repurchasing shares, signaling confidence in the company's future performance. Additionally, the company holds a stronger cash position than debt on its balance sheet, providing it with financial flexibility.
InvestingPro Data highlights JD.com's market capitalization at $39.55 billion, with an attractive P/E ratio of 12.4, which further adjusts to 8.86 when considering the last twelve months as of Q1 2024. This suggests that the company is trading at a low price relative to its near-term earnings growth. Moreover, the firm's revenue has grown by 4.98% over the last twelve months as of Q1 2024, indicating a steady upward trajectory in its core business operations.
For investors considering JD.com, it's noteworthy that analysts have recently revised their earnings expectations upwards for the upcoming period, and the company is anticipated to be profitable this year. There are additional InvestingPro Tips available for those seeking a deeper analysis of JD.com's market prospects and performance metrics. To explore these further, visit InvestingPro at: https://www.investing.com/pro/JD.
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