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When Will Dada Nexus Limited (NASDAQ:DADA) Turn A Profit?

Dada Nexus Limited (NASDAQ:DADA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Dada Nexus Limited operates a platform of local on-demand retail and delivery in the People’s Republic of China. The US$1.7b market-cap company announced a latest loss of CN¥2.0b on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Dada Nexus' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Dada Nexus

According to the 14 industry analysts covering Dada Nexus, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥542m in 2024. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 104% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Dada Nexus given that this is a high-level summary, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.4% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Dada Nexus which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Dada Nexus, take a look at Dada Nexus' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

  1. Valuation: What is Dada Nexus worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Dada Nexus is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Dada Nexus’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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