Jumia stock dips 25% in one week, quants warn against buying

The share price of Jumia Technologies, one of Africa’s largest e-Commerce companies, went down 25% in the last 5 days as investors dumped the stock. The stock started at $19.4 per share and fell to $14.09 per share as of Friday, November 21, 2021.

Jumia has seen its share price tank 65% year to date and 41.8% in the last one year. The stock has fallen from a year high $61 recorded in February 2021.

Jumia reported its third quarter 2021 results last week missing sales estimates despite recording a 9% growth. The company reported a GMV increase of 8.1% YoY to $238.1 million; Orders up 28% YoY to 8.5 million; Annual Active Consumers grew 8.1% YoY to 7.3 million. Operating losses ballooned 92.6% to $64 million compared to $33.3 million same period last year. Adjusted EBITDA losses also ballooned 94.3% to $52.5 million.

Quant ratings from analyst website, Seeking Alpha, “warned” that the stock is “high risk of performing badly”, contending that the stock is historically associated with poor future stock performance.

“Jumia has inferior profitability and decelerating momentum when compared to other Consumer Discretionary stocks, to the point that it gets a Very Bearish rating from our Quant rating system. Stocks rated Very Bearish by our Quant rating system have massively underperformed the S&P 500, as this article will describe,” Quant stated.