- Oops!Something went wrong.Please try again later.
There's been a major selloff in Jumia Technologies AG (NYSE:JMIA) shares in the week since it released its quarterly report, with the stock down 28% to US$13.57. It looks like weak result overall, with ongoing losses and revenues of €34m falling short of analyst predictions. The losses were a relative bright spot though, with a per-share (statutory) loss of €0.40 being 22% smaller than what the analysts had presumed. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Jumia Technologies from eight analysts is for revenues of €188.6m in 2021 which, if met, would be a huge 28% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 50% to €1.60. Yet prior to the latest earnings, the analysts had been forecasting revenues of €209.2m and losses of €1.75 per share in 2021. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers fell somewhat.
There was no major change to the €11.08average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Jumia Technologies at €16.36 per share, while the most bearish prices it at €8.36. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Jumia Technologies' growth to accelerate, with the forecast 28% growth ranking favourably alongside historical growth of 15% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Jumia Technologies to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at €11.08, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Jumia Technologies. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Jumia Technologies going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 3 warning signs for Jumia Technologies that you need to take into consideration.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.