JD.com, Inc.'s (NASDAQ:JD) Stock Is Going Strong: Have Financials A Role To Play?

Simply Wall St.03-27

Most readers would already be aware that JD.com's (NASDAQ:JD) stock increased significantly by 12% over the past month. We wonder if and what role the company's financials play in that price change ...

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We wonder if and what role the company's financials play in that price change ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/retail/nasdaq-jd/jdcom/news/jdcom-incs-nasdaqjd-stock-is-going-strong-have-financials-a-1\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>JD.com, Inc.'s (NASDAQ:JD) Stock Is Going Strong: Have Financials A Role To Play?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nJD.com, Inc.'s (NASDAQ:JD) Stock Is Going Strong: Have Financials A Role To Play?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-03-27 00:44 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/retail/nasdaq-jd/jdcom/news/jdcom-incs-nasdaqjd-stock-is-going-strong-have-financials-a-1><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Most readers would already be aware that JD.com's (NASDAQ:JD) stock increased significantly by 12% over the past month.   We wonder if and what role the company's financials play in that price change ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/retail/nasdaq-jd/jdcom/news/jdcom-incs-nasdaqjd-stock-is-going-strong-have-financials-a-1\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1642822792.SGD","symbol_name":"THREADNEEDLE (LUX) ASIAN CONTRARIAN EQUITY \"A\" (SGD) ACC","start_time":0,"source_url":"https://simplywall.st/stocks/us/retail/nasdaq-jd/jdcom/news/jdcom-incs-nasdaqjd-stock-is-going-strong-have-financials-a-1","article_id":"2422382623","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/company-cover/36273923-main-header/1585189627728"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2422382623","pubTimestamp":1711471499,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Most readers would already be aware that JD.com's (NASDAQ:JD) stock increased significantly by 12% over the past month...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"89618":"京东集团-SWR","LU1642822792.SGD":"THREADNEEDLE (LUX) ASIAN CONTRARIAN EQUITY \"A\" (SGD) ACC","LU0456842615.SGD":"JPMorgan Funds - Emerging Markets Equity A (acc) SGD","QID":"纳指两倍做空ETF","BK4122":"互联网与直销零售","BK4551":"寇图资本持仓","LU1880383366.USD":"东方汇理中国股票基金 A2 (C)","TQQQ":"纳指三倍做多ETF","LU0039217434.USD":"HSBC GIF CHINESE EQUITY \"AD\" INC","LU0140636845.USD":"施罗德大中华区股票A Acc","BK4112":"金融交易所和数据","BK1591":"就地过年概念","QLD":"纳指两倍做多ETF","QQQ":"纳指100ETF","LU0588545490.SGD":"Eastspring Investments - Asian Equity Income AS SGD","PSQ":"纳指反向ETF","LU0708995583.HKD":"TEMPLETON CHINA \"A\" (HKD) ACC","LU0672654166.SGD":"FTIF - Templeton Asian Growth A (acc) SGD-H1","LU1366334651.USD":"ALLSPRING EMERGING MARKETS EQUITY INCOME \"I\" (USD) INC","LU1044876610.USD":"THREADNEEDLE (LUX) ASIAN CONTRARIAN EQUITY \"ZU\" (USD) ACC","BK1502":"双十一","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","IE0008368742.USD":"首域中国增长基金I Acc","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","NDAQ":"纳斯达克OMX交易所","LU1720050803.USD":"安联全方位中国股票基金","LU0456827905.SGD":"JPMorgan Funds - China A (acc) SGD","LU0543330483.HKD":"TEMPLETON ASIAN GROWTH \"A\" (HKD) ACC","LU0572944931.SGD":"Janus Henderson Horizon China Opportunities A2 SGD","JD":"京东","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H",".IXIC":"NASDAQ Composite","SQQQ":"纳指三倍做空ETF","LU0307460666.USD":"EASTSPRING INVESTMENTS CHINA EQUITY \"A\" ACC","BK4585":"ETF&股票定投概念","LU0348825331.USD":"ALLIANZ CHINA EQUITY \"A\" (USD) INC","JDCMF":"JD.com, Inc.","09618":"京东集团-SW","LU0588546209.SGD":"Eastspring Investments - China Equity Fund AS SGD","LU1282649067.USD":"ALLIANZ ASIAN MULTI INCOME PLUS \"AMG\" (USD) INC A","LU1282649810.SGD":"Allianz Asian Multi Income Plus Cl AMg DIS H2-SGD","BK4509":"腾讯概念","LU0456846285.SGD":"JPMorgan Funds - Greater China A (acc) SGD","LU0370786039.SGD":"Fidelity Greater China A-SGD","LU0327786744.USD":"Janus Henderson Horizon China Opportunities A2 USD","BK1249":"综合零售","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","BK4579":"人工智能"},"translate_title":"京东公司（纳斯达克代码：JD）的股票走强：金融类股能发挥作用吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"89618":0.6,"09618":1,".IXIC":1,"NDAQ":1,"JDCMF":1,"JD":1,"TQQQ":0.6,"PSQ":0.6,"QID":0.6,"QLD":0.6,"QQQ":0.6,"SQQQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"Most readers would already be aware that JD.com's (NASDAQ:JD) stock increased significantly by 12% over the past month.   We wonder if and what role the company's financials play in that price change as a company's long-term fundamentals usually dictate market outcomes.      Particularly, we will be paying attention to JD.com's  ROE today.    Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested.  In simpler terms, it measures the profitability of a company in relation to shareholder's equity.  Check out our latest analysis for JD.com  How To Calculate Return On Equity?  The formula for ROE is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for JD.com is:7.8% = CN¥23b ÷ CN¥296b (Based on the trailing twelve months to December 2023). The 'return' is the amount earned after tax over the last twelve months.  Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.08 in profit.   Why Is ROE Important For Earnings Growth?  So far, we've learned that ROE is a measure of a company's profitability.  Based on how much of its profits the company chooses to reinvest or \"retain\", we are then able to evaluate a company's future ability to generate profits.  Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.  JD.com's Earnings Growth And 7.8% ROE  On the face of it, JD.com's ROE is not much to talk about.   A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 16% either.   JD.com was still able to see a decent net income growth of 8.7% over the past five years.  We reckon that there could be other factors at play here.  For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.     We then compared JD.com's net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 14% in the same 5-year period, which is a bit concerning.   NasdaqGS:JD Past Earnings Growth March 26th 2024 Earnings growth is a huge factor in stock valuation.  It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).  By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await.    Is JD fairly valued? This infographic on the company's intrinsic value  has everything you need to know.    Is JD.com Making Efficient Use Of Its Profits?    JD.com has a three-year median payout ratio of 35%, which implies that it retains the remaining 65% of its profits. This suggests that its dividend is well covered, and given the decent growth seen by the company, it looks like management is reinvesting its earnings efficiently.     While JD.com has seen growth in its earnings, it only recently started to pay a dividend. It is most likely that the company decided to impress new and existing shareholders with a dividend.      Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 22% over the next three years.   As a result, the expected drop in JD.com's payout ratio explains the anticipated rise in the company's future ROE to 13%, over the same period.      Conclusion    Overall, we feel that JD.com certainly does have some positive factors to consider.      That is, a decent growth in earnings backed by a high rate of reinvestment. However, we do feel that that earnings growth could have been higher if the business were to improve on the low ROE rate. Especially given how the company is reinvesting a huge chunk of its profits.       With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate.     To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Valuation is complex, but we're helping make it simple.Find out whether JD.com is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2422382623"}