Head-To-Head Review: Kirkland’s Home (KIRK) & JD.com (JD)

Kirkland’s Home (NASDAQ: KIRK) and JD.com (NASDAQ:JD) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Insider and Institutional Ownership

96.1% of Kirkland’s Home shares are owned by institutional investors. Comparatively, 51.5% of JD.com shares are owned by institutional investors. 7.8% of Kirkland’s Home shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Kirkland’s Home and JD.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kirkland’s Home 0.84% 4.59% 2.21%
JD.com 0.31% 3.62% 1.04%

Volatility & Risk

Kirkland’s Home has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, JD.com has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.

Valuation & Earnings

This table compares Kirkland’s Home and JD.com’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kirkland’s Home $634.12 million 0.27 $5.29 million $0.38 28.34
JD.com $55.69 billion 0.78 -$23.39 million $0.01 3,612.00

Kirkland’s Home has higher earnings, but lower revenue than JD.com. Kirkland’s Home is trading at a lower price-to-earnings ratio than JD.com, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Kirkland’s Home and JD.com, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kirkland’s Home 0 0 3 0 3.00
JD.com 0 3 9 0 2.75

Kirkland’s Home currently has a consensus price target of $13.33, suggesting a potential upside of 23.80%. JD.com has a consensus price target of $50.17, suggesting a potential upside of 38.89%. Given JD.com’s higher probable upside, analysts plainly believe JD.com is more favorable than Kirkland’s Home.

Summary

Kirkland’s Home beats JD.com on 8 of the 14 factors compared between the two stocks.

Kirkland’s Home Company Profile

Kirkland's, Inc. operates as a specialty retailer of home décor in the United States. The company's stores provide various merchandise, including holiday décor, framed arts, furniture, ornamental wall décor, fragrance and accessories, mirrors, lamps, decorative accessories, textiles, housewares, gifts, artificial floral products, frames, clocks, and outdoor living items. Its stores also offer an assortment of holiday merchandise in seasonal periods, as well as items that are suitable for gift-giving. The company operates its stores under the Kirkland's, Kirkland's Home, Kirkland's Home Outlet, Kirkland's Outlet, and The Kirkland Collection names in various off-mall venues comprising power strip centers, lifestyle centers, outlet centers, and freestanding locations, as well as enclosed malls. As of March 16, 2018, it operated 420 stores in 36 states. The company also sells its products through its kirklands.com Website. Kirkland's, Inc. was founded in 1966 and is based in Brentwood, Tennessee.

JD.com Company Profile

JD.com, Inc., through its subsidiaries, operates as an e-commerce company in the People's Republic of China. The company operates in two segments, JD Mall and New Businesses. It sells mobile handsets, consumer electronics products, and auto parts and accessories; home appliances; and general merchandise products directly to customers through its Website jd.com and mobile applications. The company also provides an online marketplace for third-party sellers to sell products to customers through its Website jd.com and mobile applications. In addition, it offers value-added fulfillment services comprising warehousing and delivery, and transaction processing and billing services to third-party sellers; online marketing services for suppliers and sellers; various financial products and services, including supply chain financing and microcredit, consumer financing, online payment, and others to suppliers and third-party sellers; and online-to-offline solutions for customers and offline retailers. As of April 25, 2017, the company operated 7 fulfillment centers and 256 warehouses, and total 6,906 delivery stations and pickup stations in 2,655 counties and districts across the People's Republic of China. JD.com, Inc. has a strategic cooperation agreement with Qihoo 360 Technology Co. Ltd. to jointly build a full-scene smart marketing platform for the company; and a strategic collaboration agreement with Hydoo International Holding Limited. The company is headquartered in Beijing, the People's Republic of China.

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