Should I Buy JD.com (JD)? Finance YouTuber Analysis

The analyst believes JD.com is absurdly cheap, trading at a P/E of just over seven for 2027 and offering a 4% dividend yield. Despite political risks in China, which are seen as priced in, the company is expected to grow earnings by double digits and has a significant share buyback program. The current low valuation and potential for government support in the tech sector make it an attractive investment.

“Die haben ein KGV für 2027 von etwas mehr als sieben. Die zahlen mittlerweile eine Dividendenrendite, die auch bei 4% liegt.”

The analyst advises avoiding JD.com due to significant government intervention in China, which can disrupt business models and hinder innovation and expansion. Examples include antitrust actions against aggressive expansion in the food delivery sector and forced contributions to 'common prosperity.' This regulatory uncertainty and the risk of government control over successful enterprises make it a risky investment.

“Das erste, das ist wahrscheinlich auch so ein bisschen so das offensichtlichere das ist eben die Regierung an sich. Da hat's jetzt aber auch in den letzten Monaten bzw. Jahren, sage ich mal, wieder Entwicklung gegeben, die, wie ich finde, das auch wieder so ein bisschen stützen.”

The analyst believes JD.com is currently undervalued with a P/E ratio of 6 and a dividend yield of 4%. Despite slow revenue growth, net income is projected to grow by 30% annually in the coming years. He acknowledges the significant risks associated with Chinese stocks but sees the current price as a 'spot price' given the fundamentals.

“Ehrlicherweise, aus meiner Sicht fallen mir nicht viele andere Szenarien ein, als dass diese Aktie in den nächsten Jahren einfach deutlich höher stehen wird.”

The analyst was stopped out of their JD.com position at break-even after a failed breakout attempt. They are now on the sidelines, waiting for either a further upward movement to re-enter or a marginal new low (potentially around $19-$20) to establish a longer-term buying zone, as technical indicators suggest a high probability of retesting lower levels.

“Wir haben hier mit der ersten Position Gewinn mitgenommen, mit der zweiten Nullf ausgestoppt und stehen jetzt an der Seitenlinie.”

The YouTuber reports that Michael Burry has sold his long positions and bought put options against JD, signaling a bearish outlook. This shift is linked to the US-China trade war, which is expected to harm Chinese tech companies through reduced demand, margin pressure, and increased regulatory hurdles.

“He opened up put option positions against Alibaba, JD, Pingjo and BU, as well as other companies such as Nvidia and Trip.com.”

The YouTuber notes that Michael Burry reduced his JD.com position by 40%, likely taking profits after the stock jumped 80% across Q3 and Q4 2024. This is seen as a response to improved sentiment towards Chinese tech due to government support and regulatory easing.

“while he added pin Joo Jo to his portfolio his previous two largest bets that being JD and Alibaba saw significant reductions 25% Alibaba and 40% in JD so why did he reduce well my best guess is that bar is simply taking profits because For the first time in a long while Chinese tech stocks have actually been performing well with Alibaba spiking 40% in Q4 2024 and JD jumping 80% across the end of Q3 and the start of Q4”

Michael Burry has increased his holdings in JD.com, seeing it as an undervalued asset within China's tech sector. Despite past regulatory crackdowns and economic slowdowns, its current deeply discounted valuation and the Chinese government's shift to market-friendly policies present a value opportunity.

“Michael best known of course for predicting the 2008 financial crisis increased his Holdings in Alibaba Buu and jd.com... these stocks are now trading at deeply discounted multiples compared to their historical valuations.”

The YouTuber highlights JD.com as another undervalued Chinese tech giant, similar to Alibaba. With an Enterprise Value to Free Cash Flow multiple of just 6.7, the company is generating substantial cash flow relative to its valuation. This makes it an attractive opportunity for value investors willing to accept the geopolitical risks.

“jd.com for example like Alibaba this is another e-commerce platform over in China there Enterprise Value is 32.8 5 billion and they produced 4.9 billion in free cash flow across the past year that's an Enterprise Value to free cash flow multiple of just 6.7.”

The YouTuber holds JD.com, noting that the stock has risen over 60% in a short period, benefiting from recent Chinese government stimulus packages.

“jd.com konnte von den jüngsten stimuluspaket der chinesischen Regierung profitieren und die Aktie ist in kürzester Zeit um mehr 60% gestiegen.”

The YouTuber mentions that JD.com was another significant Chinese name added to David Tepper's portfolio. This reflects Tepper's broader strategy of identifying value opportunities in the Chinese market during a period of depressed valuations.

“There were a couple of other notable positions added specifically in China jd.com that was the other big Chinese name.”

The YouTuber reports that Michael Burry has significantly increased his position in JD.com, viewing it as a value stock. He highlights its attractive valuation with a trailing P/E of 15.7 and forward P/E of 10.2, and an Enterprise Value to Sales multiple of 0.3, suggesting it's undervalued despite recent price appreciation.

“on a price to earnings basis these are trailing numbers Shares are trading for 15.7 times earnings on an Enterprise Value to sales multiple it's just .3”

The YouTuber recommends JD.com, noting its shares have plunged 58% this year, leading to a very low valuation of 0.3 times revenue and 9.4 times earnings. He compares it favorably to eBay, which is significantly more expensive despite similar sales expectations and declining earnings.

“given that the stock is now trading at just .3 times its revenue and at a price just 9.4 times this year's expected earnings compare that with us perer eBay.”

The YouTuber considers JD.com the cheapest AI stock with a PEG ratio of 0.88x, below his 1.0x target. He notes the company's plans for a ChatGPT-style AI tool for its e-commerce site, suggesting it's undervalued compared to other AI stocks.

“it's 15.7 our expected earnings growth over the next two years and a 13.8 time speed ratio again so at 13.8 divided by 15.7 that gives us a PEG ratio of just 0.88 times.”

The analyst identifies JD.com as fundamentally cheap, with an Enterprise Value to EBITDA of 8x, significant revenue growth over the last decade, and strong free cash flow generation. However, he personally avoids the stock due to unquantifiable risks associated with the US-China relationship and concerns about control over investments in Chinese companies, despite acknowledging its potential for substantial returns if market multiples normalize.

“for me personally it's got to be a mess because while the the numbers line up I can't get over the the issue with the with the U.S China relationship and I I'm very concerned about putting my money into companies that are in the in in China and being able to get the money out when I want or having them push in other taxes or other management uh that I can't control”