JD.com (NasdaqGS:JD) Valuation in Focus as New Challenges Weigh on Earnings and Investor Sentiment

JD.com (NasdaqGS:JD) is making headlines after its management took center stage at the 2025 Low-Altitude Industry Ecosystem Conference in Chongqing, amid growing skepticism from investors. Concerns about a shaky Chinese economy, mounting losses tied to new business lines, and fierce competition have surfaced in recent news, raising doubts about the company’s earnings outlook this year. As a result, the mood surrounding JD.com is starting to feel uncertain, particularly for those weighing whether the current share price presents an attractive entry or a warning sign.

So far this year, JD.com’s shares are down a little over 2%, with momentum stalling over the past three months despite a recent uptick in the last month. The uneven performance seems to reflect investors’ cautious outlook on both the company’s fundamentals and the broader Chinese retail sector. Aggressive moves, such as expanding into food delivery, have yet to translate into lasting confidence, even as management touts new strategic directions and appearances at high-profile industry events.

After a turbulent year and challenging earnings projections ahead, is JD.com’s current valuation an overlooked opportunity, or is the market already bracing for more disappointment?

Most Popular Narrative: 25% Undervalued

The most widely followed narrative sees JD.com as notably undervalued, emphasizing its revenue momentum, strategic investments, and future potential despite near-term concerns around profitability.

Ongoing investments in logistics, automation, and supply chain optimization (including adoption of AI and unmanned logistics) continue to reduce procurement costs, improve fulfillment efficiencies, and expand margins in the core retail segment. These efforts support further gross margin and operating margin expansion over the long term.

Is JD.com poised for a major profit breakthrough? The calculations behind this narrative rely on ambitious expansion plans, a creative approach to future earnings, and a profitability forecast that separates JD.com from its more cautious rivals. Pressed for the full story? The numbers that drive their fair value target are not what most investors expect.

Result: Fair Value of $44.52 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition in food delivery and persistent margin pressure from expansion could undermine JD.com's bullish outlook more quickly than investors anticipate.

Find out about the key risks to this JD.com narrative.

Another View: What Does the DCF Say?

While the analyst consensus points to JD.com being undervalued, our SWS DCF model also indicates the stock is trading below its estimated fair value. This echoes the earlier optimism. But could both methods be missing something important?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out JD.com for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own JD.com Narrative

If you have a different perspective or want to dig into the numbers yourself, you can construct your own narrative in just a few minutes. Do it your way

A great starting point for your JD.com research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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