China e-commerce giant JD.com early Thursday reported fourth-quarter earnings that beat expectations, with a 13.4% revenue jump that marked JD's fastest growth in nearly three years. U.S.-listed JD stock jumped initially following the report but saw its gains whittled down throughout the day.
JD said that it earned an adjusted 7.42 yuan per American depositary share on sales of 347 billion yuan, or $47.8 billion, for the December-ended quarter. Analysts polled by FactSet projected the Beijing-based company would post adjusted earnings of 6.20 yuan per ADS on sales of 330.66 billion yuan. Adjusted earnings increased 40% year-over-year.
With overall action on the stock market today rocky, U.S.-listed JD stock closed Thursday up by a fraction at 43.92. Shares gave back gains near 8% in premarket trading.
JD.com Post Best Sales Growth Since 2022
JD's 13.4% year-over-year revenue Q4 growth marked a major acceleration from 5.1% growth in the previous September-ended quarter and 1.2% in the second quarter of 2024. It is JD's fastest growth rate since the first quarter of 2022.
JD.com Chief Executive Sandy Xu said the company's results were helped by "rebounding consumption" for the Chinese economy.
"Most of our product categories as well as key metrics such as our quarterly active users and shopping frequency saw strong double-digit growth year-on-year in Q4, reflecting our growing mindshare among consumers," Xu said in a news release. "We head into 2025 with more optimism, as consumption sentiment steadily picks up, and we continue to unlock high-quality growth potentials with our strong execution of strategic priorities."
JD's revenue growth slowed starting in 2023 amid sluggish consumer spending in China and increased competition from e-commerce platforms such as PDD Holdings' Pinduoduo.
CFRA analyst Jian Xiong Lim reiterated a buy call on JD stock following the report, citing the company's ability to benefit from a government program offering subsidies for trading and replacing electronics and household appliances, among other items.
"We expect the expanded trade-in program and subsidies to drive 2025 revenue growth, though changes in U.S. trade policies, particularly regarding the de minimis exemption for Chinese imports, could impact JD's international expansion plans," Lim wrote.
JD Stock Up 28% This Year
Prior to earnings, JD gained 6% in Wednesday trading. News of the latest economic stimulus measures from the Chinese government boosted Hong Kong's Hang Seng Index to a 3.3% gain on Wednesday. On the U.S. market, JD shares broke narrowly above a 43.63 cup-with-handle buy point during yesterday's action, according to IBD MarketSurge.
While JD stock hasn't soared quite as fast as China e-commerce rival Alibaba Group, the company has been boosted by increasing investor confidence in Chinese technology companies. JD stock is up 28% so far this year, not including Thursday's early action. Shares are up 104% compared to 12 months ago.
Coming into the report, JD stock had an IBD Composite Rating of 93 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
