Why Dada Nexus Stock Blasted 26% Higher Today
What happened
China-based food-delivery specialist Dada Nexus (NASDAQ: DADA) delivered some appealing quarterly results to its shareholders. As a result, on Wednesday, the company's share price shot up by almost 26%.
So what
After market hours on Tuesday, Dada Nexus divulged its Q4 of fiscal 2021 figures. These show that revenue dipped slightly on a year-over-year basis, sliding to almost 2.02 billion yuan ($319 million) from 2.03 billion yuan ($322 million).
Dada Nexus would have shown significant growth (nearly 81%) had it not been for one crucial factor.
As it explained in its earnings release: "[E]ffective from April 2021, the cost of riders for last-mile delivery services has been directly paid through third-party companies instead of through the company. Thus, the company no longer recognizes rider-related revenue and rider-related costs in the income statement for the last-mile delivery services."
Dada Nexus particularly benefited from a significant increase in intra-city deliveries to chain merchants, the company said.
As for profitability, GAAP net loss deepened a bit to 578 million yuan ($91 million), against the year-ago shortfall of 1.54 billion yuan ($85 million). On a per-share basis, the former landed at 0.61 yuan ($0.10).
Image source: Getty Images.
This meant a solid quarter for Dada Nexus, as far as analyst estimates are concerned. On average, analysts were modeling slightly over $310 million on the top line and $0.22 for per-share net loss.
Now what
Dada Nexus proffered revenue guidance for its current first quarter. The company anticipates it will book 2 billion yuan ($317 million) to 2.05 billion yuan ($324 million) in revenue for the period. This would represent year-over-year growth of at least 72%. However this is based on the last-mile delivery payments adjustment previously mentioned.
The company did not publish any profitability guidance.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
