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3 Things Investors Need to Know before JD’s Earnings Report

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JD.com (NASDAQ:JD) will likely report its earnings results for the first quarter of 2020 on May 15 before the market opens. JD is China’s second-largest e-commerce company behind Alibaba (NYSE:BABA) in terms of sales. The company has a partnership with Google (NASDAQ:GOOGL) to assist its international expansion.

Here are the three things investors need to know before JD.com’s earnings report.

JD’s earnings expectations and forecast

JD mainly operates an online retail platform. The coronavirus outbreak, which likely started in China, has led to movement restrictions. More households have been shopping online amid lockdowns, which creates more business for JD and other online shopping platform operators. For example, Amazon (NASDAQ:AMZN) reported a big increase in its first-quarter revenue due to pandemic demand.

Wall Street expects JD’s earnings report for the first quarter to deliver an EPS of $0.09 on revenue of $19.3 billion. The consensus revenue projection implies 7.2% growth YoY (year-over-year).

JD expects first-quarter revenue growth of at least 10% YoY, which points to revenue of $19.8 billion.

Notably, JD’s earnings results for the first quarter of 2019 easily beat the consensus estimate. The company posted an EPS of $0.33 compared to the consensus for an EPS of $0.13. JD reported revenue of $18 billion compared to the consensus for revenue of $17.7 billion.

Hong Kong secondary listing and opportunity for $3.0 billion windfall

JD’s earnings report for the first quarter will arrive amid high expectations for a secondary listing of the company’s shares in Hong Kong. The company’s Hong Kong listing could be as early as next month. The listing could help JD raise about $3.0 billion. The amount would boost the company’s cash position. In March, JD unveiled a $2.0 billion stock repurchase program.

JD stock is in hot demand right now

JD shares are in high demand before the company’s earnings report. The stock closed at $47.81 per share on Wednesday, which brought its YTD (year-to-date) gains to 36%. In contrast, Alibaba and Baidu (NASDAQ:BIDU) stocks have fallen 6.0% and 25% YTD, respectively. Baidu plans to release its first-quarter results on May 18.

At this point, JD stock has pulled up nearly 90% from its pandemic lows. However, the stock still has over a 25% upside potential to Wall Street’s highest target price at $60.

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