Analysts Are Updating Their Dada Nexus Limited (NASDAQ:DADA) Estimates After Its Yearly Results

The analysts might have been a bit too bullish on Dada Nexus Limited (NASDAQ:DADA), given that the company fell short of expectations when it released its full-year results last week. It was a pretty negative result overall, with revenues of CN¥11b missing analyst predictions by 6.7%. Worse, the business reported a statutory loss of CN¥7.52 per share, much larger than the analysts had forecast prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Dada Nexus

Taking into account the latest results, the current consensus from Dada Nexus' nine analysts is for revenues of CN¥11.2b in 2024. This would reflect an okay 6.7% increase on its revenue over the past 12 months. Earnings are expected to improve, with Dada Nexus forecast to report a statutory profit of CN¥1.34 per share. In the lead-up to this report, the analysts had been modelling revenues of CN¥13.3b and earnings per share (EPS) of CN¥0.90 in 2024. So there's been quite a change-up of views after the latest results, with the analysts making a serious cut to their revenue forecasts while also granting a massive increase in to the earnings per share numbers.

The consensus has made no major changes to the price target of US$4.51, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Dada Nexus, with the most bullish analyst valuing it at US$9.38 and the most bearish at US$1.73 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Dada Nexus' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.7% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.5% annually. So it's pretty clear that, while Dada Nexus' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dada Nexus following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Dada Nexus going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Dada Nexus you should be aware of, and 1 of them is a bit unpleasant.

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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.