Heads up: Jumia’s fourth-quarter report for 2020 will be released tomorrow and it’s something a lot of investors are looking forward to.
Jumia has moved from getting constant bashing in the media to becoming a darling of the stock market. Its stock market run in the last five months has been impressive and at one time, $JMIA traded at $67.
But ahead of results, share prices are down to $51 and depending on the results tomorrow, share prices may dip or rise. One thing investors will have their eye on will be the company’s losses.
One trend we’ve seen in the last three quarters is a reduction in the company’s losses, most of which has come from Jumia’s cutting ad spend and changing its business model. Another thing to keep an eye on is Gross Merchandise Value (GMV) - the total value of all goods sold on Jumia - which has reduced in the past year.
There’s a perfectly good explanation for this; with Jumia focusing on household items rather than big-ticket items like laptops and phones, GMV has fallen. But with revenue from its third-party marketplace increasing, a reduced GMV is not the most important metric to track.
In Q3, Jumia’s gross profit after fulfilment expense reached $7.7m, compared to a loss of $2m in the third quarter of 2019. It was the first time the company recorded a gross profit after fulfilment (GPAF)
What we expect: Slightly higher GMV from Q3, reduced losses and more signs from GPAF that Jumia may one day be profitable.
Bonus: We’re also going to see Q4 reports from Opera this week so that’s something else to look forward to.