Why JD.com Could Be the Undervalued E-Commerce Stock to Watch?

September 23rd, 2025 by Trefis Team
JD: JD.com logo
JD
JD.com

JD.com stock (NASDAQ: JD) doesn’t run flashy discount apps. It doesn’t dominate live-stream shopping. And it rarely grabs headlines like PDD Holdings (NASDAQ: PDD) or Alibaba (NYSE: BABA). Yet JD.com has quietly become one of the most influential e-commerce companies in China.

Strong Q2 2025 results and higher guidance have put JD back in focus. Shares are up 14% over the past year, compared with a 17% gain for the S&P 500. Currently trading near $34, JD’s growth story is supported by strong revenue trends, expanding new businesses, and a valuation that may be too low for what the company delivers. The bigger question: could JD.com stock double in 2–3 years? Let’s take a closer look at revenues, margins, valuation, and risks.

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Revenues: Growth Accelerating

JD.com’s growth story isn’t just about size—it’s about speed. Over the past three years, the company’s top line has grown at an average rate of 8.2% annually, and in just the last twelve months, revenues climbed 14%, from RMB 1.1 trillion to RMB 1.3 trillion. That momentum picked up pace in Q2 2025, when JD reported RMB 356.7 billion ($49.8 billion) in revenue, up 22.4% year-over-year from RMB 291 billion. General merchandise sales gained 16.4%, while newer businesses like food delivery nearly tripled with a 199% surge. Service revenue, a key diversification play, jumped 29%.

So, can this pace continue? JD’s logistics network now reaches over 90% of China, enabling same- and next-day delivery and strengthening B2B partnerships. Consumer engagement is rising, with quarterly active customers and shopping frequency up 40% YoY, while the June ‘618’ shopping festival set new records for participation and orders. Overall, JD is gaining momentum in China’s competitive retail market, driven by strong core categories, fast-growing new businesses, and a robust logistics backbone. Sustaining this pace will require continued execution, but the foundation is solid.

Margins: Weak on the Surface, Improving Underneath

If there’s one area where JD still lags global peers, it’s profitability. Over the last twelve months, the company generated about RMB 31 billion in operating income, translating to an operating margin of just 2.4%. Net income came in at RMB 39 billion, a slim 3.1% margin, while operating cash flow was RMB 25 billion at a 2.0% margin. Compare that with U.S. retailers or tech firms running double-digit margins, and JD clearly has work to do.

However, there is nuance. Core retail margins are improving, and the recent dip in overall profitability largely reflects heavy investment in new businesses such as food delivery and logistics upgrades. While these ventures weigh on short-term profits, they lay the foundation for long-term growth and higher-margin revenue streams.

Valuation: Where the Case Gets Interesting

We’re assuming steady revenue growth: RMB 1.15 trillion in 2024, rising to RMB 1.32 trillion in 2025, then RMB 1.44 trillion in 2026—roughly 15% growth in 2025 and 9% in 2026. More importantly, earnings growth should outpace revenue as higher-margin businesses scale. JD’s EPS is projected at RMB 17.5 in 2025 and RMB 21.0 in 2026, a 27% and 20% jump, respectively.

Converted into dollars at the current exchange rate of 7.11 RMB/USD, that’s $2.46 per share in 2025 and $2.95 in 2026. On FY’25 numbers, JD trades at just 13x forward earnings, which is already modest for a company delivering double-digit growth. Looking out to FY’26, the picture gets more compelling: if JD continues to expand margins and investors award even a mid-20s multiple on 2026 earnings, the stock could be worth $65–$74, versus about $34 today.

The math works like this: 22x–25x applied to $2.95 in FY’26 EPS yields that upside range. Even a partial re-rating, say to 18x–20x, would still support a share price in the mid-to-high $50s, or roughly 65% above today’s levels. Simply put, JD doesn’t need perfection to deliver strong returns; solid execution and modest multiple expansion could do the trick.

Risks

Even with strong revenue growth, JD’s net income has dipped as heavy investment in food delivery and logistics weighs on profits. Competition remains fierce, with Alibaba, Pinduoduo, Meituan, and ByteDance all vying aggressively for market share. Adding to the challenge, China’s regulatory environment can shift quickly—from pricing rules to competition crackdowns—impacting growth. On top of that, broader macroeconomic headwinds, including weak consumer sentiment and a sluggish property market, continue to put pressure on retail spending.

Together, these pressures don’t erase JD’s growth story, but they highlight why execution will be critical in the years ahead.

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