
Jumia Technologies
Chart done on daily timeframe. Jumia shares are up more than 500% from their 52 week lows as buyers pour into the e-commerce stock. What’s labeled as Africa’s “first tech start-up” has excited investors across the globe in the company’s potential, but diving deeper into their fundamentals, their numbers are still fairly low. Young companies are often forgiven for having weakness in profitability, but in order to make up for it they need to post strong revenue trend, which isn’t the case for JMIA. Year over year revenue has struggled to consistently grow over the past six years, and profit margins have also remained non-existent. The company seems to be losing money year over year, and their free cash flow has dwindled down, placing them in a risky market position. What they do have on their side is hope and optimism, investors are banking on this company taking hold of the African e-commerce market, which is expected to grow to 21.5B in revenue by 2029 (+62%). Although Jumia doesn’t seem to be benefitting strongly yet, investors are hoping that its early entrance to the market gives them an edge in the years to come.
All in all, at first glance JMIA is not really a standout name compared to other e-commerce platforms, but their early adopter approach may help them down the line. Many great companies struggled in their early stages as consumer adopted their platforms and new technologies, and although this isn’t guaranteed for JMIA, it is something to consider. Keep in mind JMIA is a foreign investment, which should also be approached with a higher risk mindset. If you are invested or looking to invest then your main focus right now should be revenue and revenue projections.