Today is shaping up negative for Dada Nexus Limited (NASDAQ:DADA) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the eleven analysts covering Dada Nexus, is for revenues of CN￥9.8b in 2024, which would reflect a perceptible 5.7% reduction in Dada Nexus' sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 53% to CN￥3.45. Yet prior to the latest estimates, the analysts had been forecasting revenues of CN￥12b and losses of CN￥0.88 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Dada Nexus

The consensus price target fell 6.0% to CN￥28.68, implicitly signalling that lower earnings per share are a leading indicator for Dada Nexus' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Dada Nexus, with the most bullish analyst valuing it at CN￥67.79 and the most bearish at CN￥13.01 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 7.6% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 20% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Dada Nexus is expected to lag the wider industry.