Cowen analyst, John Blackledge, published an earnings review on JD.com, Inc (NASDAQ: JD) highlighting the weakness in the quarter as well as an issue that will likely pressure results going forward, the lost agreement with Pai Pai. Despite its challenges, the analyst said there were no changes to the Market Perform rating or $36 price target.

JD reported RMB 44.1BN in revenue, +52% y/y, 1% below consensus due to online direct sales that grew at +49% y/y, slower than revenue. Services revenue was RMB 3.5BN, ~4% above the RMB 3.3BN forecast. GMV of RMB 115BN, +71% y/y and essentially flat q/q, was in line with expectations for a deceleration from 2Q's +82% y/y.

Apparel and Footwear were the largest General Merchandise categories, with triple-digit growth. Other important categories included home furnishings, food and beverage, cosmetics and sporting goods. Looking ahead, GMV will be impacted by the shutdown of C2C channel Pai Pai, The Pai Pai agreement was terminated due to the difficulty of policing counterfeit products.

The company continued to expand on mobile, now accounting for 52% of orders (+210% y/y), up from 47% last quarter and 30% in the year-ago period.

Opex of 44.8BN was better than our 46.5BN estimate, benefiting from better than forecast 1P/3P mix. Opex was boosted in the quarter by investment in internet finance and the O2O initiative; mgmt. also discussed pricing pressure in some categories, particularly mobile phones.

GAAP Operating Income was a loss of RMB 667MM, better than expectations for a loss of RMB 897MM forecast. Non-GAAP EPS was RMB 0.01 versus Cowen's RMB (0.07) loss forecast.

For an analyst ratings summary and ratings history on JD.com, Inc click here. For more ratings news on JD.com, Inc click here.

Shares of JD.com, Inc closed at $28.81 yesterday.