What happened

Shares of JD.com (NASDAQ:JD) fell 12.7% in August of 2018, according to data from S&P Global Market Intelligence. The Chinese e-commerce titan failed to impress investors with its second-quarter earnings report.

So what

JD's adjusted second-quarter earnings of $0.05 per American Depositary Share was only half of the year-ago period's bottom-line take, although net revenues rose 31% year over year to land at $18.5 billion. Analysts had been expecting a flattish earnings performance of $0.10 per ADS.

JD's sorporate logo, including its cartoonish robot puppy mascot.

Image source: JD.com.

Now what

The soft earnings line was a direct result of JD boosting its R&D budget by 80% above the year-ago period's reading. The company is working on advanced supply chain and logistics management tools and is already reselling these services to other Chinese retailers and e-tailers.

In my view, that's a solid investment in this tech-heavy company's long-term future, and no reason at all to drop share prices nearly 13% lower. But that's what we've got, so this might be a good time to consider starting an investment position in JD.com. All told, the stock is trading 36% lower in 2018, and you can pick up shares for the low, low price of 18 times JD's free cash flow.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.