Is Jumia Stock Overvalued?

1 min read

Shares of Jumia Technologies (NYSE: JMIA), the German company that provides e-commerce services to about a dozen African countries, have surged more than 500% over the past 12 months. That rally boosted Jumia’s market cap to about $3.25 billion, or 15 times next year’s sales.

The bulls might claim that’s a reasonable valuation for a company that has an early mover’s advantage in Africa’s nascent e-commerce market. However, the bears will claim Jumia’s stock is overvalued, and that higher-growth e-commerce companies are trading at comparable valuations. Let’s see which perspective makes more sense.

Image source: Getty Images.

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