Jumia stock is far from done rallying yet: analyst says

By:
on Jul 9, 2024
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  • Benchmark analyst sees upside in Jumia stock to $14.
  • Fawne Jiang explained why in a research note today.
  • JMIA shares are trading at a year-to-date high at writing.

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Jumia Technologies AG (NYSE: JMIA) is rallying on Tuesday after a Benchmark analyst issued a super bullish note in its favour.

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Shares of the marketplace, logistics and payments service are up 30% for the day at writing but Fawne Jiang is convinced it’s not done pleasing its shareholders just yet.

Jumia stock is now trading at a year-to-date high.

Jumia stock has upside to $14

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Fawne Jiang assumed coverage of Jumia Technologies this morning with a “buy” rating. His $14 price objective suggests a more than 25% upside on top of today’s gain.

The Benchmark analyst is bullish on JMIA shares as he sees the company as well positioned to benefit from the “unmet pent-up demand” in Africa.

Jumia stock does not, however, pay a dividend at writing which makes it unattractive for the income investors.

eCommerce to grow rapidly in Africa

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Analyst Fawne Jiang expects a multi-decade eCommerce growth in Africa to be a meaningful tailwind for Jumia Technologies as it’s the leading online marketplace in that region.

The Benchmark expert forecasts eCommerce market in Africa to grow at a compound annualised rate of 20% through 2030. His research note also reads:

JMIA presents a unique investment opportunity with a highly attractive risk/reward bolstered by both organic value creation and an asset recognition longer term.

Jiang expects continued urbanization and mobile-internet expansion to deliver a material boost to Jumia stock as well. Note that shares of the Berlin-headquartered firm traded at a higher of $62 during the pandemic in 2021.

JMIA lost customers in its fiscal Q1

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Benchmark analyst Fawne Jiang recommends investing in Jumia Technologies as it’s the “only true pan-African eCommerce operator”.

The company’s logistics and payment services, he added, “promise monetisation optionality down the road and value creation beyond its status quo eCommerce play”.

In early May, JMIA said it ended its first financial quarter with 1.9 million active customers – down about 5.0%. Still, its revenue jumped 19% on a year-over-year basis to $48.9 million. Francis Dufay – the chief executive of Jumia Technologies said at the time:

I am pleased with our progress to date and remain energized about Jumia’s potential for the future. We have proven that with the right team and the right strategy, growth does not require heavy spending.

The New York listed firm also saw its gross merchandise volume increase by 5.0% to $181 million in Q1 while average order value popped some 3.0% versus the same quarter last year. Note that Jumia stock is not a very widely covered one among Wall Street analysts.

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