JD.com, Inc. JD is slated to report fourth-quarter 2024 results on March 6.

For the fourth quarter, the Zacks Consensus Estimate for revenues is pegged at $45.96 billion, indicating growth of 6.61% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pinned at 90 cents per share, suggesting 20% growth from the prior-year quarter’s reported number. The figure has remained unchanged over the past 30 days.

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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

JD.com has an impressive earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 13.76%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 25.74%.

Earnings Whispers for JD

Our proven model does not conclusively predict an earnings beat for JD.com this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

JD has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping Upcoming Results

As JD.com prepares to report its fourth-quarter 2024 earnings, investors might consider maintaining current positions or waiting for a better entry point amid mixed signals about the company's near-term performance trajectory.

The Chinese e-commerce giant is likely to have experienced modest growth in the fourth quarter, driven by several factors, including the Singles Day shopping festival, which showed positive momentum with both user numbers and order volume recording double-digit growth. The company's engagement with China's trade-in program for home appliances and electronics is likely to have continued to boost sales, though the full impact may have already been reflected in third-quarter results.

JD.com's international expansion accelerated noticeably during the fourth quarter, potentially contributing to revenue growth. The company extended its Global Sales business to Malaysia and Thailand while offering enhanced shipping options. JD Logistics opened its first self-operated warehouse in Japan, launched a Shenzhen-Kuala Lumpur air cargo route, and expanded express delivery to seven Southeast Asian countries. These initiatives signaled the company's commitment to building its "2-3 Day Delivery Circle" throughout Asia-Pacific but also required significant investment that might have pressured margins.

In the healthcare segment, JD Health introduced video consultation services and launched a Global Healthcare Service Platform, connecting users with international medical resources. While promising for long-term growth, these initiatives are likely to have required upfront investment that could have temporarily impacted profitability.

Macroeconomic conditions in China remained challenging despite government stimulus measures, potentially limiting consumer spending growth. While the company's core retail business is likely to have maintained steady performance, JD's aggressive international expansion efforts might have pressured near-term profitability as the company invested in logistics infrastructure.

Operating expenses are expected to have increased as JD ramped up marketing for Singles Day promotions and international growth initiatives. JD Logistics' major infrastructure investments, including warehouse expansion and new air routes, possibly weighed on margins despite operational efficiency improvements.

For investors, JD.com's long-term outlook remains positive, given its supply chain advantages and expanding ecosystem, but fourth-quarter results are expected to reflect a transitional period as international investments build toward future returns. Potential investors might consider waiting for clearer signals on profit margins and the effectiveness of the company's international strategy before initiating new positions.

Price Performance & Stock Valuation

JD.com shares have rallied 64.4% in the past year compared with the industry, the Zacks Retail-Wholesale sector and the S&P 500 index’s return of 24.5%, 19.5% and 14.3%, respectively.

JD has also outperformed its peers — Amazon AMZN and PDD Holdings PDD. While AMZN has gained 18.3%, PDD has lost 2.8% in the past year. Alibaba BABA has outperformed JD in the past year, returning 76.2%.

1-Year Performance

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Now, let us look at the value that JD.com offers to its investors at current levels.

Currently, JD is trading at a discount with a forward 12-month P/E of 9.08X compared with the industry’s 22.06X, reflecting a good investment opportunity.

JD’s P/E F12M Ratio Depicts Discounted Valuation

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Investment Thesis

JD.com presents a nuanced investment case ahead of fourth-quarter 2024 results, balancing discounted valuation metrics against competitive pressures in China's e-commerce landscape. While the company's robust logistics network and supply chain capabilities provide sustainable advantages, aggressive international expansion and ongoing investments in healthcare services may temporarily pressure margins. The company's participation in China's trade-in program and strong Singles Day performance demonstrate resilience, but macroeconomic challenges in China could limit near-term growth potential. Despite trading below historical multiples, investors might consider maintaining current positions or awaiting post-earnings clarity on profit trajectories and international strategy effectiveness before adding exposure.

Conclusion

Given the combination of risks and rewards, existing shareholders are advised to hold their positions, whereas prospective investors should closely monitor the company’s key developments instead of rushing in to buy the stock.

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This article originally published on Zacks Investment Research (zacks.com).

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