It’s remarkable how long the market has overlooked Chinese e-commerce giant JD.com (JD). Despite trading near the same levels it did a decade ago, the Chinese e-commerce giant has grown sales fivefold over that span and transformed into a powerful free cash flow generator.
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Its latest results make the investment case even more compelling, with revenue growth accelerating and momentum clearly building. On top of that, JD holds over $24 billion in net cash—more than half of its ~$45 billion market cap. With fundamentals this strong, it’s getting harder to justify a bearish stance on the stock.
If JD.com stock is indeed overlooked, I think a cautious Bullish position is warranted, especially at the bargain-basement prices this billion-dollar revenue-generator is currently trading at.
JD’s Growth Picks Up Steam
To gauge JD.com’s accelerating momentum, look no further than its latest quarter: revenues surged 22% year-on-year to $49.8 billion—the fastest pace in years and the strongest top-line growth since Q4 2024. Growth meaningfully outpaced last quarter’s 15.6% and last year’s modest 1.5%, marking the fourth straight quarter of sequential acceleration.
The core retail business led the charge, climbing 21% as electronics and home appliances jumped 23%, fueled by China’s nationwide trade-in subsidies and JD’s unmatched supply chain strength. General merchandise advanced 16%, with supermarkets delivering their sixth consecutive quarter of double-digit gains. Yet the real standout was user engagement: quarterly active customers leapt over 40%, shopping frequency rose even faster, and JD Plus members increased their purchases by 50% year-on-year. The June 18 shopping festival underscored this momentum, with purchasing users doubling and total orders surpassing 2.2 billion.
Equally intriguing—but often overlooked—is JD’s food delivery business. Still in its early stages, it’s scaling at breakneck speed, hitting 25 million daily orders at peak, onboarding 1.5 million merchants, and deploying 150,000 full-time riders by quarter-end. Beyond delivery fees, the bigger opportunity lies in cross-selling, as food delivery customers increasingly shop across JD’s retail ecosystem, deepening engagement platform-wide.
Profitability, EPS Dips, and the AI Push
Now, despite heavy investment in new businesses, JD Retail’s operating margin hit 4.5%, the highest ever for a promotional quarter. Gross margin expanded for the 13th straight quarter to 15.9%, helped by AI-driven supply chain automation and the rollout of JD’s “Zhilang” smart warehouse system.
So it may sound surprising that consensus EPS for FY2025 sees a dip by roughly 40% to $2.58. However, this is only because new businesses like food delivery and Jingxi run losses while scaling. The company is building capabilities now to reap profits later.
Analysts already expect a sharp rebound for FY2026, with EPS estimates of $3.73, implying a 44% spike from this year’s depressed level. Clearly, with marketing spend normalizing and AI efficiencies compounding, profitability should snap back quickly once expansion investments slow.
A Valuation Too Cheap to Ignore
Since this year’s EPS is distorted by one-off items, looking ahead to FY2026 shows JD trading at just 8.6x earnings—a valuation typically reserved for stagnating, no-growth companies. On a forward price-to-sales ratio of 0.2 and a price-to-gross-profit ratio of 2.6, both at record lows, the disconnect widens. These multiples strip out one-off costs, showing, in my view, that the core business is absurdly cheap.
Meanwhile, JD sits on $24 billion in net cash, which is over half its market cap. That enormous war chest funds buybacks (already $1.5 billion repurchased this year) and shields investors if China’s economy stays choppy.
Buying back stock at single-digit multiples while earnings recover can drive per-share value far higher over time. When a company like JD, with accelerating growth, fortress cash reserves, and proven profitability, trades this cheap, it usually means the market is looking the other way, and that there is an opportunity to take advantage of.
Moreover, current JD.com shareholders are likely best pleased with the company’s ambitious dividend package, paying out more than 3% in the notoriously difficult consumer cyclical sector, and averaging just over 1% in annual dividends.
Is JD.com Stock a Buy, Sell, or Hold?
Wall Street remains relatively bullish on JD.com, with the stock carrying a Moderate Buy consensus rating based on 11 Buy, two Hold, and just one Sell recommendations over the past three months. JD.com’s average stock price target of $41.23 suggests almost 30% upside from current levels. Therefore, even by Wall Street’s conservative standards on Chinese e-commerce stocks, JD.com is considerably undervalued.
JD.com Stock Apathy Creates a Hidden Opportunity
JD’s decade-long share price stagnation belies a business that is quietly transforming beneath the surface. Q2 highlighted this shift, with growth re-accelerating, retail margins improving, and strategic investments setting the stage for long-term expansion.
At today’s depressed valuation on normalized earnings—and with a sizable cash cushion—the market’s indifference appears misplaced. History shows that some of the best opportunities emerge when few are paying attention. Personally, I’m taking advantage by buying near-term call options, which remain attractively priced amid unusually low volatility in the stock.