JD.com JD, China's leading supply chain-based e-commerce giant, has emerged as one of the most compelling investment opportunities in 2025, with its stock surging 52.8% over the past year compared with the industry, the Zacks Retail-Wholesale sector and the S&P 500 index’s return of 22.7%, 13.8% and 10.7%, respectively. JD has also outperformed its industry peers, Amazon.com AMZN, Expedia EXPE and MercadoLibre MELI, which have returned 12.8%, 26.6% and 40.6%, respectively, in the same time frame.

While the impressive price movement has caught investors' attention, there are deeper, more fundamental reasons to consider adding JD to your portfolio that extend beyond mere momentum.

1-Year Performance

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Strong Financial Performance Signals Long-Term Growth Potential

JD.com's fourth-quarter and full-year 2024 results paint a picture of a company firing on all cylinders. The company reported fourth-quarter net revenues of RMB347.0 billion ($47.5 billion), representing an impressive 13.4% year-over-year increase, significantly outpacing broader market growth. Perhaps more telling is the company's profitability trajectory, with non-GAAP net income attributable to ordinary shareholders increasing 34% to RMB11.3 billion ($1.5 billion) in the fourth quarter, and full-year non-GAAP net margin hitting 4.1%.

The company's steady margin expansion over 11 consecutive quarters demonstrates consistent operational execution and provides confidence in management's stated goal of reaching high single-digit margins over time. This financial discipline is balanced with strategic investments in growth areas focused on general merchandise categories, user experience enhancements, and platform ecosystem development.

The Zacks Consensus Estimate for 2025 revenues is pegged at $173.05 billion, indicating 7.65% year-over-year growth, while earnings estimates suggest 11.74% growth. 

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From a valuation perspective, JD.com presents an intriguing opportunity, trading at a forward 12-month P/E of 8.58X compared to the industry average of 22.25X. This discount reflects lingering concerns about China's economic growth and regulatory environment, despite recent government stimulus measures that appear to be improving consumer sentiment.

JD’s P/E F12M Ratio Depicts Discounted Valuation

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Strategic Expansion Beyond Core Business Creates Multiple Growth Engines

JD.com has been aggressively expanding beyond its traditional retail business into high-growth sectors that leverage its core competencies in logistics and supply chain management.

JD Logistics recently opened its third warehouse in Poland, strengthening its European footprint with nearly 10,000 square meters of additional capacity. This strategic expansion improves cross-border supply chain solutions and positions JD to capitalize on growing global e-commerce trends. The company plans to double its overseas warehouse capacity by 2025, creating a robust infrastructure for international growth.

The company is also making significant inroads in specialized markets. JD Health has developed comprehensive support systems for rare disease patients, assisting over 23,000 individuals through charity programs. Its specialized services include China's largest retail platform for Food for Special Medical Purposes and innovative resources like the Doctor-Searching Map for rare diseases.

Additionally, JD's partnership with UEFA Champions League as the official e-commerce innovation partner expands its global brand visibility while opening new revenue streams through merchandise sales and innovative fan experiences.

Technology Leadership Positions JD for Next-Generation Growth

JD.com's commitment to technological innovation represents perhaps the most compelling reason for long-term investment. The company is aggressively deploying AI and automation across its operations, enhancing everything from customer experience to supply chain efficiency.

The company has implemented AI applications across numerous work scenarios, including marketing, customer service, and advanced algorithms for search and recommendations that increase traffic allocation efficiency. This technology focus extends to emerging fields like embodied intelligence, where JD has established dedicated business departments focusing on home applications.

In the automotive sector, JD Auto's partnership with Continental Tires has pioneered China's first instant tire delivery and installation service, bringing 30-minute service to a traditionally slow-moving industry. The company has also launched Xiaomi Auto's official flagship store on JD.com, further cementing its position in the rapidly growing electric vehicle ecosystem.

Investment Outlook: Well-Positioned for 2025 and Beyond

JD.com's strong financial performance, strategic diversification, and technology leadership combine to create a compelling investment case. The company's shareholder-friendly policies, including a 32% increase in annual dividend to $1.0 per ADS and commitment to its $5 billion share repurchase program, further enhance the stock's appeal.

With confidence in achieving long-term margin targets and multiple growth catalysts on the horizon, JD.com appears well-positioned to continue outperforming in 2025. The significant valuation discount compared to industry peers provides a potential margin of safety while offering upside as the company continues executing its growth strategy across multiple verticals.

For investors seeking exposure to China's digital economy with disciplined financial management and innovation-driven growth, JD.com represents an attractive opportunity beyond its impressive stock performance over the past year. JD.com currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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