Amazon (AMZN) is a stronger buy than JD.com (JD) based on current financial metrics and market trends:
- Revenue Growth: Amazon's revenue grew by 10.12%, while JD.com's revenue grew by only 0.98%12. This indicates that Amazon is growing its top line at a faster rate, which is often a sign of a healthy business.
- Net Income: Amazon's net income margin is higher than JD.com's, with 8.21% compared to 3.8%12. This suggests that Amazon is more profitable relative to its revenue.
- Amazon's net income increased by 27.29% over the past five years3, while JD.com's net income increased by 17.68%4.
- Free Cash Flow: Amazon's free cash flow is negative, which is not ideal, but it is investing heavily in growth opportunities5. JD.com, on the other hand, has a positive free cash flow, which it can use for dividends or share buybacks6.
- Market Position: Amazon is a global leader in e-commerce and cloud computing, with a strong brand and wide market presence78. JD.com, while strong in the Chinese market, faces competition from Alibaba and others1011.
- Valuation: Amazon's stock is trading at a higher price-to-earnings ratio than JD.com's, indicating that it is more expensive relative to its earnings5. This could suggest that Amazon is perceived as a more mature or stable investment.
- Recent Performance: Amazon's stock has been performing well, with a gain of 10.47% over the past month, outpacing JD.com's 28% gain812. This could be a sign of investor confidence in Amazon's growth prospects.
In conclusion, while JD.com has a strong position in the Chinese market and a positive free cash flow, Amazon's stronger revenue growth, higher net income margin, and broader market presence make it a more attractive investment option for maximum profitability with medium risk.