What’s going on with Jumia stock
Jumia stock is rising after the company announced financial results for the first quarter of 2022, revealing strong growth across its operations. As of the market close Tuesday, Jumia Technologies (NYSE:JMIA), an African e-commerce and digital payments company, saw stock up 30.9%.
Why we care
Keep in mind that a company like Jumia has seasonality, so fourth-quarter performance expects to be better than first-quarter results. With this in mind, Jumia’s gross merchandise value (the total value of goods sold through its platform) increased 27% year over year to $253 million. In addition, the total payment value with Jumia Pay rose 36.7% to $71 million.
Jumia’s revenue increased by 44% year-over-year to $47.6 million, aided by boosts in goods value and payment volume.
Notably, Jumia’s active client base increased. The firm ended Q1 with 3.1 million active customers versus 2.4 million in 2017. That said, the company had 3.8 million active clients at the end of 2021. However, in Q1, there were 2.98 orders per active customer, which is an increase from the previous quarter.
It appears that Jumia’s consumers are using its services for smaller purchases more frequently. That is precisely what the company wants to achieve. Jumia doesn’t want to be a rare choice for big transactions. Instead, it aims to be a top-of-mind market for everyday items. For this reason, the rise in orders per active customer was excellent news.
Jumia, however, hasn’t hit its stride yet. On the contrary, it has a long road ahead of it. In Q1, Jumia had an operating loss of $66 million and a gross profit margin of just 58%, down from 75% in 2021. Furthermore, delivery costs increased by 42% year over year. As a result, while Jumia stock is rising, it’s reasonable to say that this corporation still has a long way before rewarding its investors with profits.