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JD.com Stock: Where to Go after August Rally

A series of regulatory crackdowns by the Chinese authorities have dealt a major blow to China’s major tech companies. Some of the most-affected Chinese stocks included JD.com...
JD.com Stock: Where to Go after August Rally © Reuters. JD.com Stock: Where to Go after August Rally

A series of regulatory crackdowns by the Chinese authorities have dealt a major blow to China’s major tech companies. Some of the most-affected Chinese stocks included JD.com (NASDAQ:JD), Alibaba (NYSE:BABA), Tencent Holdings (OTC:TCEHY).

While JD hasn't been hit directly (yet) from regulators, it appears investors are keen on reducing exposure to China.

For JD stock, this has culminated in a decline of more than 28% from its peak this year. (See JD stock charts on TipRanks)

Yet, this is actually one of the only stocks many fund managers will touch right now. Famed growth stock investor Cathie Wood has been most bullish on JD stock, relative to its Chinese tech peers.

With the Hang Seng index rallying in recent weeks, the question is -- can this continue? Will JD stock surge back to all-time highs?

Let's take a look at what may drive this Chinese tech stock's performance from here. I am bullish on the stock.

JD Stock's Strong Recent Performance

China’s second-largest conglomerate announced its second-quarter results on August 23. As per the Q2 financial data, net revenues came in at $39.3 billion. This represents a 26% jump from the revenue generated in Q2 2020.

JD clocked net service revenue of $5.3 billion, a 49.2% year-over-year increase. Income from operations stood at $46.6 billion, while non-GAAP income from operations was $0.4 billion.

These numbers broadly show strength in the Chinese recovery from the pandemic. Investors betting on a resurgence in Chinese consumption have gotten what they wanted.

Attractive Valuation

JD stock isn't cheap, in a traditional sense. This is a still a company trading at roughly 54x forward earnings. However, on a price-to-sales basis, this stock is trading at 0.7x, a criminally low valuation for this high-growth play.

Those who believe JD can outpace analyst predictions, on the bottom line in particular, should certainly consider JD stock at these levels. This is a growth stock trading at a valuation that is nearly impossible to find in the U.S.

It's a Chinese tech company, and that carries its own set of risks. This is also a logistics-heavy company that will need to reinvest in its business to see growth over the long-term.

However, it appears these factors are more than baked into JD's current valuation right now. The company's forward-looking growth projections remain strong.

Rally Disrupted by Newly Proposed Regulations

China decided to introduce fresh regulations towards the end of last month. According to Dow Jones, this new regulatory curb will prohibit big Chinese companies with massive amounts of consumer data from floating shares in the U.S.

This new rule halted the rally that was noticed in Chinese tech stocks. Tencent Holdings stock dropped 1.1% while Alibaba and Meituan slid 3.9% and 0.8%, respectively. JD stock also dropped following the announcement alongside its peers.

The Cyberspace Administration of China stated companies with more than 1 million users would now have to seek approval before listing in foreign nations.

This sort of regulatory oversight could hamper JD's ability to raise foreign capital. However, given JD's well-capitalized structure, it's hard to argue that such capital raises may be needed from here.

Wall Street’s Take

According to TipRanks' analysts rating consensus, JD stock is a Strong Buy. Out of 12 ratings, there are 11 Buy recommendations, and one Sell recommendation.

The average JD price target is $95.23. The stock price target lies between a low of $62 per share, and a high of $125 per share.

Bottom Line

Despite the regulatory crackdowns, JD stock seems to be doing quite well. The company is focusing on expanding its line of business and moving into telehealth and supermarkets. JD’s logistics prowess, vast business network, and focus on innovation give it an edge against its competitors.

Like other Chinese tech giants, JD comes with massive growth potential. However, unlike many of its peers, JD has not yet faced any direct crackdown from authorities so far.

Accordingly, this is a stock that investors may rightly view as safe to consider right now.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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27-09-2021 19:45:14 (UTC+7)

EUR/USD

1.1707

-0.0007 (-0.06%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

EUR/USD

1.1707

-0.0007 (-0.06%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

GBP/USD

1.3715

+0.0033 (+0.24%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

USD/JPY

110.86

+0.14 (+0.13%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

AUD/USD

0.7269

+0.0011 (+0.15%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

USD/CAD

1.2663

+0.0010 (+0.08%)

Summary

Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (3)

Sell (3)

EUR/JPY

129.78

+0.08 (+0.06%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (11)

Sell (0)

EUR/CHF

1.0853

+0.0030 (+0.28%)

Summary

Neutral

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (2)

Sell (3)

Gold Futures

1,753.35

+1.65 (+0.09%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (10)

Sell (0)

Silver Futures

22.698

+0.273 (+1.22%)

Summary

Neutral

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (4)

Sell (4)

Copper Futures

4.2752

-0.0103 (-0.24%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (1)

Sell (5)

Crude Oil WTI Futures

75.52

+1.54 (+2.08%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (2)

Brent Oil Futures

78.72

+1.49 (+1.93%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (5)

Sell (0)

Natural Gas Futures

5.524

+0.324 (+6.23%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (10)

Sell (1)

US Coffee C Futures

193.15

-1.20 (-0.62%)

Summary

Neutral

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (6)

Sell (2)

Euro Stoxx 50

4,165.94

+7.43 (+0.18%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (6)

S&P 500

4,455.48

+6.50 (+0.15%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (0)

Sell (8)

DAX

15,571.85

+40.10 (+0.26%)

Summary

Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (2)

Sell (3)

FTSE 100

7,052.05

+0.57 (+0.01%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (9)

Sell (0)

Hang Seng

24,208.78

+16.62 (+0.07%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (8)

Sell (0)

US Small Cap 2000

2,253.88

-5.16 (-0.23%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (11)

IBEX 35

8,985.50

+112.40 (+1.27%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (2)

Sell (5)

BASF SE NA O.N.

64.510

+0.810 (+1.27%)

Summary

Neutral

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (6)

Sell (3)

Bayer AG NA

47.28

+0.80 (+1.72%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (8)

Allianz SE VNA O.N.

195.31

+2.97 (+1.54%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (9)

Adidas AG

279.98

-1.59 (-0.56%)

Summary

↑ Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (6)

Sell (2)

Deutsche Lufthansa AG

6.454

+0.221 (+3.55%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (9)

Siemens AG Class N

146.68

-1.43 (-0.97%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (9)

Deutsche Bank AG

11.003

+0.168 (+1.55%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (8)

Sell (0)

 EUR/USD1.1707↑ Buy
 GBP/USD1.3715↑ Buy
 USD/JPY110.86↑ Sell
 AUD/USD0.7269↑ Buy
 USD/CAD1.2663Buy
 EUR/JPY129.78↑ Buy
 EUR/CHF1.0853Neutral
 Gold1,753.35↑ Buy
 Silver22.698Neutral
 Copper4.2752Neutral
 Crude Oil WTI75.52↑ Buy
 Brent Oil78.72↑ Buy
 Natural Gas5.524↑ Buy
 US Coffee C193.15Neutral
 Euro Stoxx 504,165.94↑ Sell
 S&P 5004,455.48↑ Sell
 DAX15,571.85Sell
 FTSE 1007,052.05↑ Buy
 Hang Seng24,208.78↑ Buy
 Small Cap 20002,253.88↑ Sell
 IBEX 358,985.50Neutral
 BASF64.510Neutral
 Bayer47.28↑ Sell
 Allianz195.31↑ Sell
 Adidas279.98↑ Buy
 Lufthansa6.454↑ Sell
 Siemens AG146.68↑ Sell
 Deutsche Bank AG11.003↑ Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank5,665/ 5,715
(5,665/ 5,715) # 900
SJC HCM5,635/ 5,700
(0/ 0) # 885
SJC Hanoi5,635/ 5,702
(0/ 0) # 887
SJC Danang5,635/ 5,702
(0/ 0) # 887
SJC Nhatrang5,635/ 5,702
(0/ 0) # 887
SJC Cantho5,635/ 5,702
(0/ 0) # 887
Cập nhật 27-09-2021 19:45:16
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ↀ Giá vàng thế giới
$1,752.43+2.940.17%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2204022480
RON 95-II,III2194022370
E5 RON 92-II2071021120
DO 0.05S1658016910
DO 0,001S-V1693017260
Dầu hỏa1564015950
ↂ Giá dầu thô thế giới
WTI$75.39-0.69-0.93%
Brent$78.73-0.72-0.92%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.630,0022.860,00
EUR25.993,7727.346,60
GBP30.324,2231.591,18
JPY200,45212,05
KRW16,7520,39
Cập nhật lúc 18:54:42 27/09/2021
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