Can JD.com Stock Bounce Back After Last Week's 12% Drop?

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The recent sell-off at JD.com (NASDAQ: JD) continues. Shares of China's largest e-commerce company by revenue fell 11.8% last week, moving lower every single trading day after kicking off the week by posting its latest financials results.

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JD.com stock was already drifting lower ahead of the second-quarter report. JD.com has closed lower for eight consecutive trading days, sliding nearly 17% in the process.

Investors aren't necessarily hurting. JD.com stock hit an all-time high earlier this month. The stock remains one of this year's biggest winners, soaring 58% so far in 2017 even with the recent slide. Long-term investors may be taking the hit in stride, especially since the results weren't too shabby.

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Net revenue soared 44% to $13.7 billion during the second quarter, fueled by a 41% spike in orders. JD.com had 591.2 million fulfilled orders on its platform during the three months ending in June. The Chinese e-tailing giant now has 258.3 million annual active customer accounts, 37% ahead of where it was a year earlier. Analysts were holding out for just $13.3 billion. 

The report was also a beat on the bottom line once you adjust for one-time items. JD.com's reported loss of $0.03 a share becomes an adjusted profit of $0.10 a share, just ahead of the $0.08 a share that Wall Street pros were targeting. 

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JD.com beat expectations on both ends of the income statement, but its guidance proved problematic. It sees revenue from continuing operations for the current quarter -- adjusted for the deconsolidation of its JD Finance arm during the second quarter -- growing at a 36% to 40% rate. The outlook suggests decelerating growth even at the high end of that range, though that's not enough to justify the stock's sell-off. 

Wall Street was seemingly cool with the report. The only major firm to tweak its position was JPMorgan, where analyst Alex Yao actually boosted his price target from $48 to $55 following the earnings release. He dismisses the low margins during the second quarter as a result of seasonal promotional efforts, something that also stung other Chinese online retailers. He sees strong momentum through the rest of the year, sticking to his overweight rating on the shares on expanding margins.

Last week's pullback feels like a buying opportunity. JD.com is still growing its flagship business at a heady clip, and it was forecasting sequential year-over-year decelerating revenue growth for the third quarter last summer, too. Things worked out just fine for investors then, just as they should now for shareholders willing to put up with the volatile investment.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends JD.com. The Motley Fool has a disclosure policy.