Stock Analysis

Analyst Estimates: Here's What Brokers Think Of Dada Nexus Limited (NASDAQ:DADA) After Its Yearly Report

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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 definitely looks like a negative result overall with revenues falling 15% short of analyst estimates at US$4.9b. Statutory losses were US$12.48 per share, 50% bigger than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Dada Nexus

NasdaqGS:DADA Earnings and Revenue Growth March 10th 2021

Taking into account the latest results, the current consensus, from the eleven analysts covering Dada Nexus, is for revenues of US$1.40b in 2021, which would reflect a painful 71% reduction in Dada Nexus' sales over the past 12 months. Losses are predicted to fall substantially, shrinking 95% to US$0.91. Before this latest report, the consensus had been expecting revenues of US$9.08b and US$5.87 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

There was no major change to the CN¥305average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Dada Nexus analyst has a price target of CN¥54.95 per share, while the most pessimistic values it at CN¥38.97. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 71% by the end of 2021. This indicates a significant reduction from annual growth of 41% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that Dada Nexus' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$305, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Dada Nexus going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Dada Nexus that we have uncovered.

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