Since reporting results that beat analyst estimates on November 15, JD.Com (ADR) (NASDAQ:JD) has become something of a battlefield stock.

While bullish analysts, including our own Luke Lango, took up their price targets to $45 per share, a rally in that direction failed, and it opened for trade on November 28 at $38.72.

It’s worth asking why that happened.

Helping the bears were reports that some investment groups had been selling the stock during the most recent reporting period, and that short interest has risen. In response, some investment houses reduced their rating on the stock, but only to “buy” from “strong buy.”

My most recent article on JD.Com, dated October 26, urged readers to buy it, citing its partnerships with companies such as Wal-Mart Stores Inc (NYSE:WMT). But is it time to re-evaluate that call?

JD.Com and Best Buy

JD.Com is, as I wrote, more like Amazon.com, Inc. (NASDAQ:AMZN) than Alibaba Group Holding Ltd. (NASDAQ:BABA), in that it takes delivery of merchandise and warehouses it, rather than merely facilitating transactions. This means it has wafer-thin margins.

In that great second-quarter report, for instance, JD.Com reported sales of 83.746 million Chinese yuan, which you need to divide by the yuan’s current value of 6.6 to the dollar, and net income of 1.014 million yuan. Whipping out the most important tool for people doing international investments, a calculator, we find that it made less than $154,000 on sales of $12.68 billion.

Remind you of anyone? Here is a hint. Best Buy Co Inc (NYSE:BBY) earned $238 million in net income for its most recent quarter on sales of $9.32 billion. Admittedly, it doesn’t have the 30% growth rate of JD.Com, but the two companies are of similar size and Best Buy is more profitable.

What Makes JD.Com Attractive

If you’re buying a retailer, you’re buying a cash machine whose revenue doesn’t usually hit the net income line. What makes JD.Com attractive is its operating cash flow, which came in at nearly 25 billion yuan (about $4 billion) during each of the last two quarters. (Best Buy’s operating cash flow over the last two quarters comes to about $2 billion.)

You should always put your enthusiasm into perspective with stocks like JD.Com. The company founded as Jingdong Century Trading Co. Ltd. in 1998 and formally based (by the way) in the Cayman Islands is big, but maybe not as big as you think.

In China, JD.Com is best known as an electronics retailer that makes deliveries using drones and autonomous vehicles, and which, like Amazon, is putting its money into the physical infrastructure of warehousing, breaking bulk and delivery.

The most important recent event involving the company may have been its meeting with Samsung Electronic (OTCMKTS:SSNLF) executives, who are looking to tweak their own China strategy against strong local suppliers.

The Bottom Line on JD.Com

Liu Qiangdong, also known as Richard Liu, founded JD.Com and at just 43, recently entered the ranks of the country’s billionaires. He’s still a hungry man in a hurry, anxious to expand in every direction, even banking. 

When you’re buying JD.Com stock, you’re betting that Mr. Liu can win in an increasingly crowded market. That’s not a bad bet.

But is it worth the price you’re paying? The company’s market cap is $55 billion, meaning you’re paying more for this thin-margin retailer than its most recent annual sales of about $40 billion. True, it’s an online retailer, but it’s a pure play retailer, nothing like Amazon with its movies, cloud and global footprint.

If you buy JD.Com, do it with your eyes wide open.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in BABA and AMZN.