Often falling under the shadow of Alibaba (NYSE:$BABA), JD.com (NASDAQ:$JD) has been the long-running Chinese e-commerce underdog. JD reported its 3Q17 earnings before market opening on Monday, November 13th, with results cheered by investors as revenue from continuing operations surged a whopping 39%. 

JD’s roughly $50 billion market capitalization pales in comparison to the nearly $500 billion value given to Alibaba- but this could indicate there is value to be had in shares. Companies need to embody more than just revenue growth, so let’s take a look at JD’s 3Q17 report.

JD sees a point in its life cycle where revenue growth in the early years is about to be more profitable on a GAAP basis. The Wall Street Journal estimates that 2018 GAAP earnings per share will be $0.39. With 1.42 billion shares outstanding according to Yahoo! Finance, that reflects a total of just under $550 million. On a non-GAAP basis, JD.com has generated RMB 4.4 billion year-to-date.

As for its balance sheet, JD.com completed the quarter with almost RMB 42 billion in cash, an increase of 71% year-over-year. That is a result of JD’s strong cash flow generation, where over the last twelve months, adjusted operating cash flow is RMB 25 billion and free cash flow is RMB 15 million.

Further, out of the 39 analysts covering the company, 32 have recommended a buy rating, 4 a hold rating, 2 an overweight rating, and 1 a sell rating. The median price target from these analysts is $50.35, while the highest price target is set at $60.00.

So, what’s the bottom line? JD.com is optimally positioned within the industry and its company cycle to flourish in the e-commerce world. With its growing revenue, top-line expansion, and exposure to the two largest economies in the world (U.S. and China), we wouldn’t be surprised to see the valuation of JD.com to increase well over $100 billion in the very near future.

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