Is Now the Right Time to Buy JD.com Stock?
JD.com's (NASDAQ: JD) stock dipped 4.5% on Nov. 18 after the Chinese e-commerce giant posted a mixed third-quarter earnings report. Its revenue rose 11% year over year to 243.5 billion yuan ($34.2 billion), which missed analysts' expectations by $270 million. However, its adjusted net income doubled year over year to 10 billion yuan ($1.4 billion), or $0.88 per ADS, which easily cleared the consensus forecast by $0.25.
JD's numbers look a lot better than Alibaba's, but is it the right time to invest in China's second-largest e-commerce player?
JD differs from Alibaba in three ways. First, it generates most of its revenue through first-party sales instead of third-party sales like Alibaba's Taobao and Tmall. JD's approach generates lower-margin revenues because it takes on its own inventories and fulfills those orders on its own, but that approach also enables it to exercise tighter quality controls. JD has gradually opened up its platform to third-party sellers, but that ecosystem is still dwarfed by its own first-party marketplace.
Source Fool.com
