Dada Nexus (NASDAQ: DADA shareholders take further losses as stocks fall 15% this week, bringing year-over-year losses to 24%

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Dada Nexus Limited (NASDAQ: DADA) Shareholders should be happy to see the stock price rise 22% last month. But that doesn’t change the reality of the past twelve months’ underperformance. The cold reality is that the stock has fallen 24% in one year, underperforming the market.

Based on last week’s investor sentiment for the Dada Nexus is not positive, so let’s see if there is a mismatch between fundamentals and the stock price.

Check out our latest review for Dada Nexus

Since Dada Nexus has not made a profit in the last twelve months, we will focus on revenue growth to get a quick view of its business development. Shareholders of unprofitable companies generally expect strong revenue growth. Indeed, the rapid growth in income can be easily extrapolated to the expected profits, often of considerable size.

Last year, Dada Nexus saw its turnover increase by 50%. It’s a solid result that is better than most other loss making companies. Considering the revenue growth, the 24% drop in the share price looks pretty severe. Our sympathies to the shareholders who are now under water. On the bright side, if this company moves its profits in the right direction, such top-line growth could be an opportunity. Our brains have evolved to think linearly, so learning to recognize exponential growth is helpful. We are, in some ways, simply the wisest of monkeys.

The image below shows how revenue and income have tracked over time (if you click on the image you can see more details).

NasdaqGS: DADA Revenue and Revenue Growth September 19, 2021

Dada Nexus is a well-known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Considering we have a good number of analyst forecasts, it might be worth checking this out. free graph showing consensus estimates.

A different perspective

While Dada Nexus shareholders are down 24% on the year, the market itself is up 36%. While the goal is to do better than that, it’s worth remembering that even large, long-term investments sometimes underperform for a year or more. Notably, the loss over the past year is not as severe as the 28% drop over the past three months. This likely indicates that the company has recently disappointed shareholders – it will take time to win them back. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. To do this, you need to know the 3 warning signs we spotted with Dada Nexus.

If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of companies that have proven they can increase their profits.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the US stock exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.
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