DADA Stock Jumps on Solid Q1 Performance

Chinese e-commerce platform Dada Nexus Ltd. (NASDAQ: DADA) has reported solid results for the first quarter of 2022. Adjusted net loss during the quarter narrowed to RMB 0.49 per share from RMB 0.65 per share in the same quarter last year.

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Net revenues increased 74% year-over-year to RMB 2.03 billion. Net revenues of the Dada Now segment totaled RMB 623.1 million and JDDJ generated new revenues of RMB 1.4 billion.

The company ended the quarter with cash, cash equivalents, restricted cash and short-term investments of RMB 4.62 billion.

CEO’s Comment

The Chairman and CEO of Dada, Philip Kuai, said, “Since the completion of JD.com’s (NASDAQ: JD) increased investment in Dada, we have further strengthened collaboration under the omnichannel strategy, to jointly explore the huge potential in the on-demand retail industry. Amidst macro challenges, we will stay focused on expanding offerings to customers and enabling local merchants to succeed in the digital age.”

Outlook

For the second quarter, the company expects revenue between RMB 2.25 billion and RMB 2.35 billion, reflecting a year-over-year increase of 59% and 66%.

About Dada Nexus

Based out of Shanghai, Dada provides local on-demand retail and delivery services through its mobile platforms, websites, and mini-programs.

It operates JDDJ, an on-demand retail platform for retailers and brand owners, and Dada Now, which is an on-demand delivery platform for merchants and individual senders.

Wall Street’s Take

After the results were announced, J.P. Morgan (NYSE: JPM) analyst Andre Chang upgraded the rating on the stock to Buy from Hold and increased the price target from $7.50 to $10 (44.3% upside potential).

In a research note to investors, the analyst said, “The significant uncertainties facing the China internet sector are beginning to abate on the back of recent regulatory announcements.”

Chang expects the e-commerce, local service and digital entertainment sectors to be the early beneficiaries of the regulatory developments.

Overall, the stock has a Strong Buy consensus rating based on four Buys. DADA’s average price target of $18.55 implies 167.7% upside potential. Shares have lost 68.8% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insights into Dada’s first-quarter performance.

According to the tool, Dada’s website traffic registered a 3,621.3% sequential rise in global visits in the first quarter. Further, the footfall on the company’s desktop website and mobile app have grown almost 4,905% and 108.5%, respectively.

The uptrend in the company’s website visits supports the year-over-year rise in its revenue and earnings. This shows that TipRanks’ website traffic tool helps in making reliable predictions about a company’s performance.

Conclusion

Following the release of the results, after the market closed on Monday, DADA stock rose 2% to end the day at $7.07. The company is expected to grow on the back of positive regulatory developments in China.

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash.

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