It's been a pretty great week for Dada Nexus Limited (NASDAQ:DADA) shareholders, with its shares surging 19% to US$6.62 in the week since its latest quarterly results. The statutory results were not great - while revenues of CN¥2.6b were in line with expectations,Dada Nexus lost CN¥1.36 a share in the process. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Dada Nexus after the latest results.
View our latest analysis for Dada Nexus
Following the latest results, Dada Nexus' 14 analysts are now forecasting revenues of CN¥12.5b in 2023. This would be a major 26% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 77% to CN¥1.58. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥12.6b and losses of CN¥1.43 per share in 2023. While this year's revenue estimates held steady, there was also a noticeable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 12% to US$14.15, with the analysts signalling that growing losses would be a definite concern. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Dada Nexus, with the most bullish analyst valuing it at US$19.83 and the most bearish at US$9.60 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Dada Nexus' rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 28% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Dada Nexus to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Dada Nexus going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Dada Nexus that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.