Dada Nexus (DADA) AI Stock Analysis

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Dada Nexus

(NASDAQ:DADA)

Rating:49Neutral

Price Target:―

Dada Nexus struggles with financial performance, particularly in profitability and cash flow management, which are significant concerns. While technically the stock shows upward momentum, the lack of comprehensive financial health and negative valuation metrics paint a cautious picture for potential investors.

Positive Factors

Financial Performance

Dada printed a better-than-expected 2Q24 with total revenues 4.7%/3% better than analyst/consensus estimates contributed by 47% year-over-year growth in Dada Now.

Management

The newly elected Chairman Mr. Kevin Qing Guo is viewed as a positive addition to the board and could bring valuable advice on high-level strategic direction.

Negative Factors

Growth Projection

Into the second half, JD Now is expected to still experience negative growth while Dada Now growth likely decelerate though remain healthy given high base.

Dada Nexus (DADA) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$557.20M

Dividend YieldN/A

Average Volume (3M)4.02M

Price to Earnings (P/E)―

Beta (1Y)0.59

Revenue Growth-13.54%

EPS Growth-3.33%

CountryUS

Employees2,159

SectorConsumer Cyclical

Sector Strength76

IndustrySpecialty Retail

Share Statistics

EPS (TTM)>-0.01

Shares Outstanding258,246,150

10 Day Avg. Volume4,008,787

30 Day Avg. Volume4,016,097

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.24

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$1.50

Price Target Upside-30.23% Downside

Rating ConsensusHold

Number of Analyst Covering0

Dada Nexus Business Overview & Revenue Model

Company DescriptionDada Nexus Limited operates a platform of local on-demand retail and delivery in the People's Republic of China. It operates Dada Now, a local on-demand delivery platform that provides intra-city delivery and last-mile delivery services on an on-demand basis to chain merchants, small- and medium-sized enterprise merchants, and individual senders; and JDDJ, a local on-demand retail platform for consumers, retailers, and brand owner. The company was incorporated in 2014 and is headquartered in Shanghai, the People's Republic of China.

How the Company Makes MoneyDada Nexus generates its revenue primarily through service fees charged to merchants and delivery fees from consumers. The company earns commissions from retailers on the JD-Daojia platform based on the gross merchandise volume (GMV) of transactions facilitated through the platform. Additionally, Dada Now generates income by charging delivery fees to customers who utilize its logistics services. Strategic partnerships, particularly with major retail chains and e-commerce platforms like JD.com, further bolster its revenue streams by expanding its reach and service offerings. The company also benefits from the growing demand for efficient delivery solutions in urban areas, which drives increased usage of its platforms.

Dada Nexus Financial Statement Overview

Summary

Dada Nexus faces significant financial challenges, particularly in profitability and cash flow generation. While the balance sheet shows a strong equity position, the ongoing losses and negative cash flows highlight potential risks to financial sustainability.

Income Statement

Negative

Dada Nexus has shown inconsistent revenue growth with a decline of 8.06% from 2023 to 2024. The company is operating at a significant loss with negative net income and EBIT margins. The gross profit margin has also decreased, reflecting challenges in cost management and revenue generation.

Balance Sheet

Neutral

The company's balance sheet shows a stable equity position with a high equity ratio of 69.16% in 2024, indicating financial stability. However, the debt-to-equity ratio remains low, suggesting limited leverage. The declining stockholders' equity over recent years may indicate ongoing financial risks.

Cash Flow

Negative

Free cash flow remains negative, with no significant improvement over the years. The operating cash flow to net income ratio in 2023 was negative, reflecting inefficiencies in converting sales into actual cash flow. The lack of operating cash flow in 2024 is concerning for liquidity management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
9.66B	10.51B	9.37B	6.87B	5.74B
	Gross Profit
2.44B	3.98B	3.62B	1.73B	1.02B
	EBIT
-2.16B	-1.15B	-2.12B	-2.58B	-1.76B
	EBITDA
-585.04M	-1.45B	-1.62B	-2.39B	-1.56B
	Net Income Common Stockholders
-2.04B	-1.96B	-2.01B	-2.47B	-1.71B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.00B	3.45B	3.94B	1.71B	6.23B
	Total Assets
5.21B	7.57B	9.05B	5.28B	9.55B
	Total Debt
40.02M	15.13M	141.03M	182.00M	881.26M
	Net Debt
-2.96B	-1.88B	-1.09B	-330.83M	-4.58B
	Total Liabilities
1.61B	2.02B	2.05B	1.49B	2.52B
	Stockholders Equity
3.61B	5.56B	7.00B	3.79B	7.03B
Cash Flow		Free Cash Flow
0.00	-388.09M	-949.18M	-2.67B	-1.13B
	Operating Cash Flow
0.00	-380.84M	-945.44M	-2.66B	-1.11B
	Investing Cash Flow
0.00	1.21B	-1.03B	-686.66M	-229.76M
	Financing Cash Flow
0.00	-85.20M	3.05B	-1.55B	5.89B

Dada Nexus Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2.15

Price Trends

50DMA

1.93

Positive

100DMA

1.80

Positive

200DMA

1.64

Positive

Market Momentum

MACD

0.06

Negative

RSI

81.04

Negative

STOCH

80.95

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DADA, the sentiment is Positive. The current price of 2.15 is above the 20-day moving average (MA) of 2.00, above the 50-day MA of 1.93, and above the 200-day MA of 1.64, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 81.04 is Negative, neither overbought nor oversold. The STOCH value of 80.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DADA.

Dada Nexus Risk Analysis

Dada Nexus disclosed 96 risk factors in its most recent earnings report. Dada Nexus reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

We cannot guarantee that any share repurchase program will be fully consummated or that any share repurchase program will enhance long-term shareholder value, and share repurchases could increase the volatility of the price of our ADSs and could diminish our cash reserves. Q4, 2023

Jingdong Bangneng may have actual or potential conflicts of interest with us. Q4, 2023

If we determine our goodwill and other intangible assets to be impaired, our results of operations and financial condition may be adversely affected. Q4, 2023

Dada Nexus Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABA	81 Outperform	$290.40B	15.91	13.04%	0.81%	4.28%	28.42%
PDD	78 Outperform	$166.00B	11.29	45.06%	―	57.51%	82.28%
JD	77 Outperform	$52.97B	8.14	19.81%	2.94%	8.13%	91.39%
CPNG	74 Outperform	$49.84B	198.48	6.06%	―	20.88%	-80.08%
Sector *	62 Neutral	$6.84B	11.22	2.83%	3.93%	2.65%	-21.93%
DADA	49 Neutral	$557.20M	―	-44.36%	―	-13.54%	-3.33%
JMIA	49 Neutral	$396.78M	―	-134.38%	―	-23.23%	―

* Consumer Cyclical Sector Average

Performance Comparison

DADA

Dada Nexus

2.15

0.42

24.28%

33.35

3.46

11.58%

BABA

Alibaba

120.73

41.84

53.04%

PDD

PDD Holdings

119.24

-30.48

-20.36%

JMIA

Jumia Technologies AG

3.24

-3.00

-48.08%

CPNG

Coupang

27.45

4.64

20.34%

Dada Nexus Earnings Call Summary

Earnings Call Date:Mar 05, 2025

(Q3-2024)

% Change Since: 5.39%|

Next Earnings Date:May 20, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong growth in user engagement and revenue for Dada's platforms, particularly JD NOW and Dada NOW, with significant improvements in operational efficiency and store expansion. However, there were challenges in JD NOW revenue due to decreased advertising and increased administrative costs.

Q3-2024 Updates

Positive Updates

JD NOW User Growth

Year-on-year growth in monthly transacting users and orders through the JD App increased by over 100% this quarter. High-frequency users through the JD App more than doubled.

Dada NOW Revenue Increase

Net revenues from Dada NOW increased by 39% year-on-year to RMB 1.5 billion, driven by strengthened partnerships with chain merchants and enhanced delivery service quality.

Enhanced Fulfillment Efficiency

The average fulfillment time for JD NOW orders was shortened by more than 20% year-over-year, improving delivery efficiency.

Store Expansion

The number of operating stores increased by over 70% year-over-year to more than 600,000 stores, expanding product offerings.

Improved Net Loss Margin

Non-GAAP net loss ratio was 2.4%, narrowing by 3.7 percentage points compared to the previous quarter, due to improved cost efficiency.

Negative Updates

Decreased JD NOW Revenue

Net revenues for JD NOW were affected by a decrease in online advertising and marketing services revenues, as well as a decrease in fulfillment services due to the delivery fee waiver program.

Increased General and Administrative Expenses

General and administrative expenses rose due to an increase in the provision for credit loss and litigation-related expenses.

Company Guidance

During Dada's third quarter 2024 earnings call, CFO Henry Jun Mao highlighted several key metrics indicating the company's robust growth trajectory. JD NOW experienced over 100% year-on-year growth in both monthly transacting users and orders via the JD App, demonstrating strong user engagement and increased penetration among JD users. Dada NOW reported a 46% year-on-year growth in net revenues for the first nine months of the year, reaching RMB 1.5 billion in the third quarter alone, fueled by enhanced partnerships with chain merchants. The company's total net revenues for the quarter amounted to RMB 2.4 billion. Despite a non-GAAP net loss of RMB 59 million, the loss margin improved by 3.7 percentage points sequentially, thanks to better cost efficiency and optimized consumer subsidy strategies. Additionally, the average fulfillment time for JD NOW orders decreased by over 20% year-over-year, reflecting improvements in delivery efficiency. The call underscored Dada's focus on high-quality growth, user experience, and the synergies between its retail and delivery platforms to drive sustainable long-term expansion.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.