Probe the Geographic Boundaries of E-Commerce With Jumia Technologies

Not everyone in the United States will be familiar with Jumia Technologies (NYSE:JMIA), but market traders are really starting to catch on to JMIA stock. The company has a major presence in Africa as an e-commerce platform.

Jumia (JMIA) banner at the New York Stock Exchange
Source: Christopher Penler / Shutterstock.com

It’s been fascinating to watch the daily trading volumes in JMIA stock grow over the past couple of years. As you might expect, Jumia came into the spotlight in 2020 as the onset of the novel coronavirus catalyzed global e-commerce.

Equally fascinating is the idea that JMIA stock’s best days could come in 2021. If Jumia plays catch-up with the famous e-commerce giants of other nations, the blue-sky potential would be enormous.

Thus, the billion-dollar question revolves around whether Jumia can lead the African e-commerce market, and whether that market is worth pursuing. If so, then JMIA stock may be a bargain at just about any price.

JMIA Stock at a Glance

Speaking of price, let’s take a closer look how JMIA stock got to where it is today. Suffice it to say that it’s been a wild but profitable ride for JMIA shareholders who got in at the right time.

Back in early May of 2019, JMIA stock was riding high at the $47 level. Today, the bulls’ objective should be to not only capture this level, but to hold it throughout 2021 if possible.

Of course, that’s easier said than done. JMIA stock has had some deep dips in the not-too-distant past. At one point in March of 2020, JMIA was as low as $2.15.

Traders who stayed the course were soon rewarded, though, as JMIA stock powered its way up to $21 in early August. That was followed by a retracement to the $8 area in October.

Still, faithful JMIA stock holders would triumph in late 2020. The share price climbed quickly in November and December. If you can believe it, JMIA shares traded above $45 on Dec. 23. So, are there reasons to expect the stock to continue on this trajectory?

A Coiled Spring

Sometimes, a bear-turned-bull can be a stock’s greatest champion.

In regard to JMIA stock, the flipped bear I’m referring to is none other than famous short seller Citron Research. This analytic firm is known for conducting deep research — and for issuing devastating bearish stock calls.

It’s fair to say that in May of 2019, Citron didn’t like JMIA stock too much. In 2020, however, Citron’s singing an entirely different tune and JMIA shareholders will surely like the sound of it.

The Citron analysts even went so far as to compare JMIA stock to a “coiled spring.” What forces are coiling Jumia for an imminent big move?

An obvious catalyst that’s been in effect for a while now is the Covid-19 pandemic. Jumia Nigeria CEO explains, “In the wake of COVID-19, we have continued to strive to operate so that consumers can continue to stay at home, use e-commerce to shop, and stay safe in this trying time.”

Fertile Ground

In a nation of 1.3 billion people but still only 523 million internet users, the blue-sky theme keeps coming to mind. Or perhaps fertile ground would be a better analogy as Jumia’s planting seeds today for profitability in the future.

Research firm McKinsey estimates that by the year 2025, African e-commerce will be worth $75 billion. Furthermore, Africa is the world’s fastest-growing continent in the world.

Plus, believe it or not, Africa will account for 50% of the global population growth between now and the year 2050. Nigeria in particular has a young demographic skew as more than 40% of the population is under the age of 14.

Also, over 50% of Nigeria’s registered voters are under 35 years of age. The point is that Africa’s a largely untapped and underappreciated pool of youthful e-commerce consumers is poised for exponential growth.

The Takeaway

With all of that in mind, Citron is preparing for the “coiled spring” of JMIA stock to go to $100.

As an informed investor, you don’t have to be so ambitious. Rather, you can look at the data, which is clearly bullish for African e-commerce. And with that data and a vision of future growth, you can accumulate a reasonably sized position in JMIA.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2020/12/probe-the-geographic-boundaries-of-e-commerce-with-jmia-stock/.

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