Should Value Investors Buy JD.com (JD) Stock?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is JD.com (JD). JD is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. JD has a P/S ratio of 0.26. This compares to its industry's average P/S of 0.75.

Finally, investors should note that JD has a P/CF ratio of 9.09. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.44. Over the past year, JD's P/CF has been as high as 16.32 and as low as 7.66, with a median of 10.26.

Value investors will likely look at more than just these metrics, but the above data helps show that JD.com is likely undervalued currently. And when considering the strength of its earnings outlook, JD sticks out at as one of the market's strongest value stocks.

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JD.com, Inc. (JD) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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