If you invested $10,000 in JD.com stock 5 years ago, here’s how much you’d have today

JD.com (JD -2.98%) is one of the largest e-commerce companies in China and, in terms of direct sales, the largest retailer in China. The company competes closely with Alibabawhich operates based on the marketplace model, and PDD holdingsaspiring discount online retailer.

While JD.com has grown rapidly throughout much of its history, the company has recently faced intensifying price competition from Alibaba and PDD’s Pinduoduo, weak consumer demand in China in the wake of Covid-19 lockdowns, and regulatory clampdowns in China on the sector , which influenced JD.com and its competitors.

Revenue rose 7% year-over-year in the first quarter, the best result in two years and a sign that more aggressive discounting could help the company regain market share. Despite e-commerce price wars, JD.com grew adjusted operating income about 9% year over year to $1.2 billion in the quarter.

How JD.com has performed over the past five years

JD.com’s stock has rebounded from recent lows in recent weeks following better-than-expected results in its first-quarter earnings report. The chart below shows JD.com’s performance over the last five years with an initial investment of $10,000. As you can see, the company’s stock rose and then fell sharply as the pandemic boom gave way to recent struggles.

Data according to YCharts.

The chart shows that a $10,000 investment in JD.com stock five years ago would be worth $12,380 today, including reinvested dividends. This would significantly lower the results S&P500which more than doubled during that time.

JD.com may continue its recovery, but challenges for Chinese e-commerce companies remain. While the company’s shares appear cheap at a price-to-earnings ratio of 16, the company faces a lot of uncertainty in China.