JD Rides on User Growth: Can Retail & Food Delivery Drive More Gains?

JD.com reported strong Q2 2025 operational performance, with Quarterly Active Customers (QAC) surging over 40% and Retail revenue growing 20.6%, while new businesses, particularly food delivery, saw a 199% increase, driven by enhanced user engagement and loyalty from JD Plus members. This accelerated user growth and strategic investments in logistics are expected to power future gains in both core retail and high-frequency services, despite intense competition from Alibaba and PDD Holdings. Although JD's stock has underperformed YTD, it trades at a forward 12-month P/E of 10.35x, significantly below the industry average, with analysts projecting a 31.74% EPS rebound in 2026 after a forecast 2025 decline.

Analysis

JD.com demonstrated robust operational momentum in Q2 2025, with quarterly active customer (QAC) growth accelerating over 40% and driving a 20.6% increase in Retail revenue and a 199% surge in its new business segment, primarily food delivery. This user engagement is further evidenced by a 50% rise in shopping frequency among its premium JD Plus members and a doubling of purchasing users during its 618 Grand Promotion. However, this strong fundamental performance contrasts sharply with its market valuation and stock performance. Year-to-date, JD's shares have risen only 1.3%, significantly lagging the Internet-Commerce industry's 12.2% growth. The company trades at a forward P/E of 10.35x, a steep discount to the industry average of 24.7x, reflecting market concerns. These concerns are likely fueled by intense competition from Alibaba's rapidly growing Taobao Instant Commerce and PDD's success in user acquisition, alongside a consensus forecast for a 36.15% earnings decline in 2025 before an anticipated 31.74% rebound in 2026.

Key Decisions for Investors

• Investors could consider the significant disconnect between JD's strong operational growth and its low forward P/E of 10.35x as a potential value opportunity, contingent on the company achieving its projected 31.74% earnings rebound in 2026.
• It is critical to monitor competitive advancements from Alibaba and PDD, as their success in user acquisition and instant commerce directly impacts JD's ability to maintain market share and monetization growth.
• Given the forecasted 36.15% earnings decline for 2025, a cautious or hold stance may be prudent until there are clear signals of margin stabilization and a positive inflection in earnings trajectory, justifying the current Zacks Rank #3 (Hold).
• Pay close attention to the performance of the food delivery segment and the return on logistics investments, as these are positioned as key drivers for improving user engagement and unlocking future value.