Alibaba's Profits Affected by Competition in Food Delivery
Written by Emily J. Thompson, Senior Investment Analyst
Source: WSJ
Alibaba's Financial Performance
- Profitability Decline: Alibaba Group reported an 18% decrease in adjusted net profit, amounting to 33.51 billion yuan (approximately $4.70 billion) for the quarter ending in June.
- Market Competition: The decline in profitability is attributed to aggressive spending on consumer discounts aimed at gaining market share in the highly competitive food-delivery sector.
Competitive Landscape
- Rivalry with Meituan and JD.com: The ongoing price war with competitors, particularly Meituan and the new entrant JD.com, has intensified the pressure on Alibaba's profit margins.
- Strategic Spending: Alibaba's strategy involves significant investment in discounts to attract consumers, which is impacting its financial performance amid fierce competition.
Analyst Views on JD
Wall Street analysts forecast JD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for JD is 38.83 USD with a low forecast of 28.00 USD and a high forecast of 50.50 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
7 Buy
1 Hold
1 Sell
Moderate Buy
Current: 30.000
Low
28.00
Averages
38.83
High
50.50
Current: 30.000
Low
28.00
Averages
38.83
High
50.50
About JD
JD.Com Inc is a company principally engaged in the e-commerce business, including online retail and online marketplace mainly through its retail mobile apps and www.jd.com website (collectively, JD Platform). The Company operates its businesses through four segments. JD Retail segment, including JD Health, JD Industrials, and other components, mainly engage in online retail, online marketplace and marketing services in China. JD Logistics segment includes both internal and external logistics businesses. Dada segment is a local on-demand delivery and retail platform in China. New Businesses segment mainly include JD Property, Jingxi and overseas businesses. The Company mainly conducts its businesses in the domestic market and overseas markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
