It's been a good week for JD.com, Inc. (NASDAQ:JD) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.7% to US$51.20. Revenues were in line with expectations, at CN¥240b, while statutory losses ballooned to CN¥1.92 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for JD.com

After the latest results, the 44 analysts covering JD.com are now predicting revenues of CN¥1.09t in 2022. If met, this would reflect a solid 11% improvement in sales compared to the last 12 months. Earnings are expected to improve, with JD.com forecast to report a statutory profit of CN¥3.82 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.13t and earnings per share (EPS) of CN¥5.13 in 2022. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

The analysts made no major changes to their price target of US$83.91, suggesting the downgrades are not expected to have a long-term impact on JD.com's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic JD.com analyst has a price target of US$115 per share, while the most pessimistic values it at US$58.43. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that JD.com's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2022 being well below the historical 24% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% annually. So it's pretty clear that, while JD.com's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$83.91, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for JD.com going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for JD.com that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.