As you might know, JD.com, Inc. (NASDAQ:JD) recently reported its third-quarter numbers. Using consensus GAAP estimates, sales of CN¥135b (Chinese Yuan) surpassed estimates by 5.0%, although earnings per share missed badly, coming in 23% below expectations at CN¥0.41 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.
Following the latest results, JD.com's 35 analysts are now forecasting revenues of CN¥662.7b in 2020. This would be a huge 22% improvement in sales compared to the last 12 months. Earnings per share are expected to soar 104% to CN¥5.26. Before this earnings report, analysts had been forecasting revenues of CN¥659.4b and earnings per share (EPS) of CN¥5.08 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of CN¥266, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values JD.com at CN¥364 per share, while the most bearish prices it at CN¥191. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the JD.com's past performance and to peers in the same market. It's pretty clear that analysts expect JD.com's revenue growth will slow down substantially, with revenues next year expected to grow 22%, compared to a historical growth rate of 30% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 17% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkJD.com will grow faster than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around JD.com's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that JD.com's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for JD.com going out to 2023, and you can see them free on our platform here.
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