JD.com Stock Breaks Out Into Buy Zone – Investor's Business Daily

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JD.com Inc Cl A Ads

JD.com Inc Cl A Ads

JD

$6.62 8.01% 122%

IBD Stock Analysis

  • Shares broke out of cup-with-handle pattern; buy point at 85.49
  • Stock is up 150% this year, while rival Alibaba shares are up 35%
  • Composite Rating is 99 out of 99, Relative Strength Rating is 96

Composite Rating

Industry Group Ranking

Emerging Pattern

Cup with Handle

* Not real-time data. All data shown was captured at 1:03PM EST on 11/04/2020.

JD.com (JD) is the IBD Stock Of The Day, a leading China e-commerce giant that continues to perform well under rough market conditions. JD.com stock broke out into a buy zone Wednesday.

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The Beijing-based company competes primarily with Alibaba (BABA) in the e-commerce space, followed by Pinduoduo (PDD).

JD.com stock on Wednesday broke out of a cup-with-handle formation with a buy point of 85.49, extending the buy range to 89.76. Shares jumped 8% to close at 89.31 on the stock market today.

JD.com stock is up about 150% this year. By comparison, Alibaba stock is up 35%.

JD.com has a multitude of business units, and offers a vast selection of products, across every major category. This includes electronics, apparel, home furnishings and appliances. It also sells fresh food and groceries. In addition, it’s also transforming to become a leading supply-chain-based technology and service provider.

Further, it holds strategic partnerships with Walmart (WMT), Google-parent Alphabet (GOOGL) and China-based Tencent Holdings (TCEHY), among others.

JD.com Stock: Rivals Jump As Well

Also moving up strongly Wednesday was Pinduoduo, climbing 10% to 107.65 and a new high. Alibaba stock rose 4.2%, near 297.70.

JD.com reported second-quarter results on Aug. 17 that beat estimates, leading to a breakout for JD stock. Among highlights in the second-quarter earnings report, active annual customers jumped 30% to 417.4 million from the year-ago period. Mobile daily active users grew 40%.

Revenue climbed 30% to $28.5 billion, which was about $1 billion above estimates. The company has achieved double-digit revenue growth every quarter going back several years and has been consistently profitable.

JD.com has not yet announced a reporting date for third-quarter earnings. However, Alibaba reports quarterly results Thursday morning.

Walmart established a relationship with JD.com in 2016 and owns a 9.8% stake in the company. JD.com collaborates with Walmart on e-commerce. That includes the establishment of a Sam’s Club flagship store and Walmart China flagship store on JD.com’s website.

Another JD.com partner is Alphabet, which invested $550 million in JD.com in 2018. The two companies are exploring the creation of next-generation retail infrastructure services.

JD.com’s strategic partnership with China-based internet giant Tencent has a number of moving parts. For example, JD.com has access to Tencent’s wildly popular messaging and mobile payment service called WeChat. The partnership drives mobile users to JD.com.

JD.com Has Top Composite Rating

The IBD Stock Checkup Tool shows that JD.com has a perfect IBD Composite Rating of 99. The rating means JD.com stock currently outperforms 99% of all stocks in terms of the most important fundamental and technical stock-picking criteria.

The stock also has a Relative Strength Rating of 96. The rating tracks market leadership by showing how a stock’s price movement over the past 52 weeks measures up against that of other stocks.

The stock’s relative strength line hit a record high Wednesday, a positive sign. The relative strength line compares the stock’s daily price performance with that of the S&P 500. An upward-sloping RS line means the stock is outperforming the S&P 500. A downward-sloping line means the stock is lagging the S&P 500.

Also, JD.com sports a healthy EPS Rating of 92, which compares quarterly and annual earnings-per-share growth with all other stocks.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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