Jumia Technologies' shares experienced a 11% increase in value today.
Jumia Technologies, the Africa-focused e-commerce platform, announced its Q2 2025 financial results, revealing a robust performance and a significant reduction in losses. The company's revenue increased by 25% year-over-year, reaching $45.6 million, and its operating loss decreased by 18% to $16.5 million.
The strong operational momentum was not lost on analysts, with RBC Capital raising its price target on Jumia Technologies to $6.50 per share. The convincing outlook on reaching profitability, based on improved fundamentals, has bolstered market confidence, reflected in Jumia's stock rising more than 11% during the trading session on Monday.
Brad Erickson, an analyst at RBC Capital, made several bullish points in his research note detailing the change. He focused on the development of the order count as a potential factor that could bring the company to profitability sooner than expected. Erickson continued to rate Jumia stock as only a sector perform (hold).
The company also raised its full-year 2025 guidance for GMV, surpassing $180 million, and reiterated its strategic goal of achieving breakeven on Loss before Income Tax by Q4 2026 and full profitability by 2027. The growth was mainly driven by the core physical goods business, with an 18% increase in orders and a 13% rise in active customers year-over-year.
Despite the improvements, Jumia Technologies remained unprofitable, with operating loss deepening to over $20 million. However, Erickson expressed a cautiously optimistic view of Jumia's second quarter, speculating that the company could reach breakeven on the bottom line by the end of 2026.
It's worth noting that the S&P 500 index slumped by 0.3% on Monday, but this did not seem to affect Jumia Technologies' positive performance. The price target raise did not occur on a random day, but several trading sessions after the second-quarter results were reported.
In summary, RBC Capital's price target increase is driven by Jumia’s: - Robust 25% revenue growth - Sharply reduced losses and cash burn - Strong operational progress in physical goods sales - Raised full-year revenue guidance and clear timeline to profitability by 2027.
[1] Jumia Technologies AG Q2 2025 Earnings Release [2] RBC Capital Markets Research Note on Jumia Technologies AG [4] Jumia Technologies AG Q2 2025 Earnings Presentation
