JD.com (NASDAQ:JD) stock benefitted from a great first quarter. For the first three months of the year, JD stock rose by almost 55%. Now, trade-war concerns and slowing revenues have brought down JD in recent weeks.

As of this writing, the price stands at just over $26 per share, about 20% below its all-time high. Although JD should prosper long-term, the lingering trade war means JD will more than likely continue to fall in the near-term.

From a long-term perspective, I like JD stock. Former GE (NYSE:GE) CEO Jack Welch made it a point to invest in either the largest or second-largest company in an industry. If he led GE today, he might have bought the stock. JD is China’s second-largest retailer, lagging only Alibaba (NYSE:BABA).

A Closer Look at JD Stock

Also, despite not having a cloud division like Alibaba or Amazon (NASDAQ:AMZN), JD typically draws the “Amazon of China” distinction. Unlike Alibaba, JD has followed Amazon’s lead in building a logistics infrastructure.

Even better, as James Brumley argues, its move into Indonesia could bring JD leadership in a key emerging market of around 264 million people. Most analysts tend to focus on China and India. However, JD has set its sights on a high-growth market with a population almost as large as the U.S. With a gross domestic product per capita of nearly $3,900 per person, it closely mirrors China’s per capita GDP in the early 2000s. When the business media finally decides to pay attention to the Indonesia story, JD will have already solidified its position there.

Consequently, I also think investors should focus less on the price-to-earnings (PE) ratio. The 26.4 multiple may seem high for a retailer. However, as with Amazon, massive infrastructure spending weighs on profits. Conversely, JD looks very cheap when compared with revenues. JD trades at a price-to-sales (PS) ratio of only 0.55. This compares with a multiple of almost 3.8 for Amazon and a 7.5 PS ratio for Alibaba.

JD Stock and Short-Term Obstacles

Despite its long-term appeal this company has too many factors weighing it down to buy now.

The fact that JD stock is a Chinese equity makes it much harder to trade. Chinese laws forbid U.S. investors from buying their stocks. As a result, traders must buy a Cayman Islands-based holding company claiming to represent JD.com stock.

Killing the goose that lays the golden egg will not serve China well. Hence, for the most part, I do not worry about owning stock in the holding company instead of the firm itself. Still, in the face of tenuous U.S.-China relations, investors need to increase the risk premium that comes with this arrangement.

Also weighing on the stock is the rape allegation surrounding founder Richard Liu. Though authorities released Mr. Liu from criminal liability, the 21-year-old victim has filed a civil suit against him. JD tends to move significantly based on news surrounding the case.

The trade war has lingered longer than most analysts, including myself, have anticipated. Since JD partners with Walmart (NYSE:WMT) to sell in the U.S. and other places, a trade war can have both direct and indirect adverse effects. As my colleague Josh Enomoto correctly states, without the U.S. middle class, there is no Chinese middle class. Consequently, I would avoid JD until the trade war shows apparent signs of ending.

Final Thoughts on JD Stock

Current economic conditions make JD stock a long-term winner facing likely near-term struggles. JD’s logistics investment in both China and Southeast Asia gives the company a competitive moat that few will likely match. Moreover, its investment in Indonesia will serve the company well once investors begin to recognize it as one of Asia’s rising economic powers.

However, in the end, China’s prosperity depends on America’s middle class. As a result, the stock has fallen as the trade war continues to slow the company’s revenue growth rate. As long as this dispute continues, I do not see JD gaining much traction.

Still, do not assume these conditions will remain in place forever. Eventually, both the U.S. and China will come to an agreement. At that point, I see little that will stop JD stock.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.