If you’re looking to invest in an e-commerce stock that doesn’t have a sky-high valuation, I encourage you to check out Jumia Technologies (NYSE:JMIA). You might be surprised to find that JMIA stock is still quite affordable.
This company, which is based in Africa, has come a very long way. For the company’s ninth anniversary, Jumia chose the slogan “Celebrating You.”
That slogan is referring to new and loyal customers, but Jumia’s shareholders have much to celebrate as well. JMIA stock isn’t a penny stock anymore – but it’s also cheap enough to capture the attention of value-focused investors.
Of course, you’ll want to believe in Jumia, and African e-commerce in general, before taking a position in the stock. So, let’s take a trip to an exciting, emerging economy and discover what could be a vast opportunity.
JMIA Stock at a Glance
Back in mid-March of 2020, traders could have picked up shares of JMIA stock for $2 and change.
Those days are in the rear-view mirror, and you won’t likely get to buy the shares at that price again.
In a stunning rally, Jumia shares rebounded to a 52-week high of $69.89 in February of this year.
Those were exciting times, but the rally wasn’t sustainable. JMIA stock tumbled over the next few months, landing at around $28 on June 23.
If you’re just discovering this stock now, then you might have a chance to pick up some shares at a bargain price.
Jumia’s market capitalization is still below $3 billion, but that could grow in the coming months and years. And if that happens, then the current shareholders might be sitting on a gold mine.
An Amazing Journey
Reflecting on the company’s nine years in the African e-commerce sector, Jumia Nigeria CEO Massimiliano Spalazzi said, “It has simply been an amazing journey.”
Spalazzi is 100% right about that, but really, the journey is just getting under way.
That’s because African e-commerce is far from a saturated market. There’s still plenty of room for expansion in the long term.
InvestorPlace contributor Tom Kerr provides a handful of data points that paint a picture of a largely untapped market opportunity:
- Africa has a population of 1.3 billion.
- That includes more than 500 million internet users.
- It also comprises $4 trillion in household and business spending.
- Africa’s population is expected to double by 2050.
Clearly, there’s room for more internet adoption/penetration on the African continent (with only 500 million out of 1.3 billion currently).
Meanwhile, Jumia dominates e-commerce in Africa.
The company operates in 11 countries in Africa, which together comprise 70% of Africa’s gross domestic product (GDP) and roughly 70% of the continent’s internet usage.
Driving Consumer Engagement
So far, we’ve suggested that Jumia not only operates within a potentially hyper-growth market, but also that the company dominates that space.
Yet, there’s more to the story. In particular, Jumia’s stakeholders should appreciate how the company provides a complete e-commerce ecosystem.
As the company states in its investor presentation, Jumia’s “integrated ecosystem is geared towards driving consumer engagement.”
You might be familiar with e-commerce platforms that let you buy and sell goods online. That’s certainly part of Jumia’s business model, but it goes far above and beyond that.
Imagine having one company in your country that provides all of the following services:
- Food delivery
- Utilities bill payment
- Airtime recharge
- Classifieds
- Instant delivery
Add to those services a wide range of product offerings, which include home goods, phones and electronics, as well as fashion and beauty products.
This type of one-stop shop exists in Africa, and its name is Jumia.
The Takeaway
It takes a forward-thinking mind to appreciate the true value proposition inherent in JMIA stock.
That value will be unpacked over time – maybe months, or maybe years.
This should be fine with patient investors who see the ripe opportunity in African e-commerce – and in a market-dominating company like Jumia.
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.
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