JD.com's JD second-quarter 2025 results highlight a striking contrast between explosive growth and mounting losses. The company’s New Businesses segment, led by food delivery, achieved an impressive 199% year-over-year revenue surge, driven by massive subsidies, zero-commission policies for merchants and an expanded rider network exceeding 150K. Daily orders now surpass 25 million, with over 1.5 million high-quality merchants onboard, reinforcing JD’s aggressive push into this market.
However, this rapid growth comes at a steep cost. The segment posted a stunning operating loss of RMB 14.8 billion in the quarter, translating to a negative operating margin of 106.7%. This means JD spent more than RMB 1 for every RMB 1 earned, with heavy promotions and logistics investments — particularly around events like the 618 Festival — driving costs higher.
Losses are accelerating, following an RMB 1.3 billion deficit in the first quarter, showing mounting cash burn that could reach RMB 34 billion in 2025 if trends persist. Marketing and promotional spending alone increased 127.6% year on year, further adding to the financial pressure.
Despite exceptional growth, competition and losses continue to widen, showing no clear path to profitability. Success will depend on cost discipline, margin improvement and operational efficiency, none of which are evident yet. JD's food delivery venture remains a high-risk gamble, one that investors should closely monitor to determine if it transitions from growth at any cost to sustainable profitability.
JD’s Key Rivals in the Food Delivery Space
DoorDash DASH, the U.S. food delivery leader, leverages strong logistics, 42 million monthly users and deep merchant partnerships to outpace rivals. DoorDash expands beyond meals with grocery, alcohol and convenience delivery, strengthened by deals with Albertsons and Grocery Outlet for rapid, low-cost service. While DoorDash dominates Western markets with scale and unit economics, it lacks presence in China and JD.com’s supply-chain depth, making it formidable globally but less relevant in JD’s core battleground.
Alibaba’s BABA food delivery arm, Ele.me, holds the second-largest food delivery market (33%), and was recently integrated into Alibaba’s core e-commerce unit, boosting synergies through Taobao Instant Commerce and Flash Purchase. Ele.me benefits from Alibaba’s vast ecosystem, financial strength and user base, enabling subsidies and rapid growth to 40-80 million daily orders. Compared to JD.com, Ele.me gains an edge through tighter platform integration and more cost-efficient expansion.
JD.com's Price Performance, Valuation & Estimates
Shares of JD.com have declined 9.3% year to date against the Zacks Internet - Commerce industry’s return of 14.6%.
JD’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, JD.com is trading at a forward 12-month price-to-earnings ratio of 9.47X, lower than the industry’s 25.2X. JD carries a Value Score of A.
JD’sValuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for JD’s full-year 2025 revenues is pegged at $183.33 billion, indicating 14.04% year-over-year growth. The consensus mark for JD’s 2025 earnings is pegged at $2.68 per share, which increased 7.6% over the past 30 days. The earnings figure suggests a 37.09% drop over the figure reported in 2024.
Image Source: Zacks Investment Research
JD.com currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
See This Stock Now for Free >>JD.com, Inc. (JD) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
DoorDash, Inc. (DASH) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
