Yahoo Finance JD.com, Inc. Just Recorded A 129% EPS Beat: Here's What Analysts Are Forecasting Next
As you might know, JD.com, Inc. (NASDAQ:JD) just kicked off its latest third-quarter results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of CN¥174b, some 2.4% above estimates, and statutory earnings per share (EPS) coming in at CN¥4.70, 129% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for JD.com
After the latest results, the 38 analysts covering JD.com are now predicting revenues of CN¥890.8b in 2021. If met, this would reflect a substantial 29% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to tumble 35% to CN¥12.52 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥884.2b and earnings per share (EPS) of CN¥12.67 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.8% to CN¥629. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on JD.com, with the most bullish analyst valuing it at CN¥113 and the most bearish at CN¥70.72 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting JD.com is an easy business to forecast or the the analysts are all using similar assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Next year brings more of the same, according to the analysts, with revenue forecast to grow 29%, in line with its 26% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So it's pretty clear that JD.com is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on JD.com. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for JD.com going out to 2024, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for JD.com that we have uncovered.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
