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JD.com (JD) to Report Q1 Earnings: What's in the Offing?

Zacks Equity Research
·4-min read

JD.com, Inc. JD is slated to report first-quarter 2020 results on May 15.

For first-quarter 2020, the company expects net revenues to improve 10% on a year-over-year basis. The Zacks Consensus Estimate for revenues is pegged at $19.2 billion, suggesting growth of 6.3% from the year-ago reported figure.

Moreover, the consensus mark for earnings has remained steady at break-even over the past 30 days.

The company has a trailing four-quarter positive earnings surprise of 123.98%, on average.

JDcom Inc Price and EPS Surprise

JDcom Inc Price and EPS Surprise
JDcom Inc Price and EPS Surprise

JDcom Inc price-eps-surprise | JDcom Inc Quote


Factors to Note

The company’s JD Retail segment is expected to have acted as a key catalyst in the first quarter courtesy of strengthening momentum across lower-tier cities and robust omnichannel strategy.

Moreover, growing initiatives to deliver enhanced customer experience might have aided the company in gaining further traction among middle-class customers in lower-tier cities during the to-be-reported quarter.

JD.com leverages data-based customer insights on its e-commerce platform and has strong network of flagship stores of international brands on its platform. These may have benefited the first-quarter performance.

Additionally, the company’s Jingxi platform is likely to have facilitated penetration into lower-tier cities during the quarter under review.

All these factors might have contributed to purchase order number and growth in gross merchandise volume (GMV) during the first quarter.

Further, strengthening onmichannel offerings of the company is expected to get reflected in the first quarter performance of JD Retail. The new experience store namely JD E-SPACE and new omnichannel store formats — 7FRESH LIFE and SEVEN FUN are likely to have contributed to the results of the quarter to be reported.

Apart from JD Retail, the company’s New Businesses segment is likely to have benefited the first-quarter performance.

JD.com’s strengthening momentum across third-party logistics, Flash Delivery initiative and expanding 24-hour delivery service in the lower-tier cities are expected to have driven the company’s logistics and other services revenues in the first quarter

Further, the integration of Artificial Intelligence technology into the company’s warehouse network might have continued accelerating the delivery of its direct sales orders services during the quarter under review.

Although coronavirus outbreak is likely to have impacted the company’s operations during the quarter under review, its strong initiatives to combat the pandemic have been commendable.

Moreover, growing momentum of JD Health on the heels of 24/7 free online medical consultation and psychological counselling services during the coronavirus-led crisis situation is likely to get reflected in the company’s first quarter results.

However, macroeconomic headwinds in China and mounting investment costs are likely to have weighed on the first-quarter performance.

Additionally, rising competitive pressure in the e-commerce market from Alibaba BABA might have acted as a headwind.

What Our Model Says

Our proven model doesn’t 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

JD.com has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks to Consider

Here are a few stocks that you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Nutanix Inc NTNX has an Earnings ESP of +1.68% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA Corporation NVDA has an Earnings ESP of +0.15% and a Zacks Rank #2.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
JDcom Inc (JD) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
Nutanix Inc (NTNX) : Free Stock Analysis Report
 
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Zacks Investment Research