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Why Dada Nexus Is Soaring 30% Higher Today

What happened

Shares of Dada Nexus (NASDAQ: DADA) are soaring nearly 30% higher in morning trading Friday, after the Chinese delivery logistics and retail platform operator reported third-quarter earnings following Thursday's market close.

So what

The market's reaction to the report seems to be the polar opposite of what occurred after Dada Nexus reported its second-quarter results, which were nearly as strong as those recorded this time around. Back then, though, it appeared the delivery specialist's outlook for the third quarter was underwhelming.

Image source: Getty Images.

Now what

The fears the market had three months ago were apparently not justified as Dada Nexus reported an 85% jump in revenue and a 57% increase in the number of orders placed over the trailing 12 months, or 1 billion.

Total gross merchandise value handled in the period more than doubled, and the number of active consumers jumped 77% year over year.

All of its business components seem to be performing quite well, but it is still generating losses; however, those narrowed a little this period with operating losses falling to 450 million renminbi ($68.57 million) from RMB 500 million last year. Net losses amounted to RMB 0.48 per share compared with RMB 1.89 a year ago.

Although Dada Nexus stock initially fell after the company's last earnings report, it quickly began growing again, climbing more than 40% before its latest surge.

As the company forecasts fourth-quarter revenue to be as much as 2.1 billion renminbi, it would amount to nearly double the results from last year.

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Rich Duprey 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.


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