It’s funny how a stock can flip from bearish to bullish on seemingly no news in the matter of one day. That’s exactly what JD.Com Inc(ADR) (NYSE:JD) did a few weeks ago, and since making the move, JD stock hasn’t looked back.
So what happened? $38 had been support all year for JD.com stock, which is why we outlined a low-risk trade based on that level. In late October though, that level gave way. Instead, JD stock price was determined to “fill the gap” it made in May when it jumped from $35.80-ish.
In the matter of one day, JD stock price fell to that level and reversed, rocketing higher. It grinded up to $40 and is trading well since the company reported earnings this week and charged through Single’s Day over the weekend.
So what do we make of JD.com now?
JD.Com Earnings and 11/11
Nov. 11 marked Single’s Day in China. While all the attention generally falls to Alibaba Group Holding Ltd (NYSE:BABA), JD.com moves a respectable amount of gross merchandise value (GMV) as well. The JD.com news was positive this year, as sales hit $19.1 billion (127.1 billion yuan) for its 2017 Single’s Day haul. That’s up 50% year-over-year (YoY).
The numbers aren’t really comparable, though. The headline results show that JD came up just short of Alibaba’s $25.4 billion mark. But consider that JD’s total began counting from the beginning of the month, whereas BABA’s are from one 24-hour period. It really shows how impressive BABA has become over the years, not to the discredit of JD.com.
No matter how you tally the score though, JD had good results. It only added fuel to the fire a few days later when the company beat on earnings per share and revenue estimates. Sales grew nearly 40% YoY, while earnings came in 130% above analysts’ 10 cents per share consensus estimate.
Gross profit jumped 50% and while analysts were looking for a 10-cent-per-share profit, they were ultimately looking for a net loss of about 213 million yuan. Instead, JD delivered a 1 billion yuan profit on the bottom line. EBITDA more than doubled and guidance is calling for full-year revenue growth of 35% to 39%.
There’s a lot to like in the quarter.