Over the past several weeks, China e-retail giant JD.Com Inc(ADR) (NASDAQ:JD) has come roaring back.

Mostly due to near-term margin compression concerns, which are the result of growth-oriented investments, JD stock dropped from $50 at the end of January to $35 at the end of May.

But recently, the market has started to realize that near-term margin compression really isn’t that big of a deal. After all, the only reason margins are under pressure is because JD is spending big to grow big. In the near-term, these big growth investments will fuel huge top-line growth. Longer-term, once the business scales, the investments will peel back and profit margins will soar on a huge revenue base.

This is a strategy straight out of the Amazon.com, Inc. (NASDAQ:AMZN) and Netflix, Inc. (NASDAQ:NFLX) playbook. Spend big. Get big. And then scale profit margins higher.

It looks like the market is finally coming around on the JD growth strategy. Over the past few weeks, JD stock has rallied from $35 to $41.

This rally is far from over. JD is a big growth company with huge growth potential through international e-commerce expansion, logistics, artificial intelligence and cloud. JD stock simply isn’t priced appropriately considering those huge growth prospects.

Here’s a deeper look.

JD Is a Big Growth Company

No matter which way  you look at it, JD is a big growth company with big go-forward growth prospects.

Front and center is the company’s burgeoning e-commerce business, which presently dominates the China e-retail landscape alongside Alibaba Holdings Ltd (NYSE:BABA). This is the company’s biggest growth driver at the present moment, and is the main reason why revenue growth has been in excess of 40% for several years in a row now.

Growth in the e-commerce business will remain robust. Not only is the China e-retail scene far from done growing — China per capita consumer spend is less than a fifth of U.S. per capita consumer spend — but JD is also branching out into new markets. The company is making a big push into Europe, Australia and Southeast Asia. The sum of these expansion initiatives ensures a promising growth opportunity ahead for JD’s commerce business.

But commerce isn’t the only thing JD does. The company is also king of the China logistics market, as the company built a massive logistics network to help support its massive e-retail business. This logistics network is so big that the logistics side of JD’s business is now its own company, JDLogistics, and just raised $2.5 billion.

Over time, as the e-retail markets in China and Southeast Asia mature, the logistics industry will become an increasingly big beneficiary of increased e-retail shipment volumes. Just look at the steady gains United Parcel Service, Inc. (NYSE:UPS) and FedEx Corporation (NYSE:FDX) have made over the past decade due to e-retail expansion in the U.S.

JDLogistics will benefit from a similar boost over the next decade as Southeast Asia e-retail markets mature.

JD is also building a nascent cloud business with hyper-growth potential. Jumping into this space gives the company yet another multi-year growth driver with huge potential not only in China, but globally.

All together, then, this is a big growth company with many years of big growth ahead of it. Between e-commerce, logistics, and cloud expansion, JD has guaranteed itself double-digit growth into the foreseeable future.

JD Stock Is an Undervalued Stock

JD stock simply isn’t priced for this reality.

Revenue growth has been in excess of 40% for several years in a row now. Tougher laps and a bigger base will naturally erode growth rates over the next five years. But not by much, considering explosive growth potential through international e-retail expansion. Consequently, this is easily a 25% revenue growth company over the next five years, representing still big growth but a slowdown from today’s 40%-plus growth rates.

Margins are depressed right now. But that is due to big investments into big growth areas. Eventually, those investments will peel back, and margins will head considerably higher. Therefore, I think JD can reasonably grow net profit margins to 4% in five years, versus 1.4% in 2017 and 0.8% in 2016.

Bottom Line on JD Stock

Under these assumptions that JD is a 25% revenue growth company with potential to grow margins to 4%, I think JD can do about $3.80 in earnings per share in five years. A market-average growth multiple of 20-times forward earnings on $3.80 implies a four-year forward price target of $76. Discounted back by 10% per year, that equates to a present-day value for JD stock of over $50.

This is a big growth company with an undervalued stock. Recently, sentiment has turned regarding this company’s medium- and long-term growth prospects. This sentiment shift will likely propel JD stock back to fair value territory of over $50.

As of this writing, Luke Lango was long JD, AMZN, and BABA.