When Will Dingdong (Cayman) Limited (NYSE:DDL) Breakeven?

We feel now is a pretty good time to analyse Dingdong (Cayman) Limited's (NYSE:DDL) business as it appears the company may be on the cusp of a considerable accomplishment. Dingdong (Cayman) Limited operates an e-commerce company in China. The US$961m market-cap company announced a latest loss of CN¥6.7b on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Dingdong (Cayman) will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Dingdong (Cayman)

Dingdong (Cayman) is bordering on breakeven, according to the 8 American Consumer Retailing analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥454m in 2024. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 84% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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We're not going to go through company-specific developments for Dingdong (Cayman) given that this is a high-level summary, though, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Dingdong (Cayman) is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Dingdong (Cayman), so if you are interested in understanding the company at a deeper level, take a look at Dingdong (Cayman)'s company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is Dingdong (Cayman) worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Dingdong (Cayman) is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Dingdong (Cayman)’s board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.