Why Jumia Technologies Stock Soared Today

Shares of Jumia Technologies (NYSE: JMIA) were surging today after the African e-commerce company reported solid growth in orders, despite a decline in revenue, and guided to full-year profitability in 2027.

The stock's gains seemed to come not because the overall results were strong, but because after years of challenges, Jumia appears to be at an inflection point, especially as the company had never before given profitability guidance.

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As of 2:07 p.m. ET, the stock was up 24% on the report.

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Jumia clears the deck

Jumia's revenue declined 26%, or 18% in constant currency, to $36.3 million, though that includes the impact of exiting Tunisia and South Africa. Gross merchandise volume (GMV) was down 11%, or 2% in constant currency, to $161.7 million.

However, orders for physical goods were up 21% in the quarter, its fastest growth rate in two years, and active customers ordering physical goods rose 15%. In Nigeria, the company delivered strong results, with orders up 22% and GMV up 20%.

On the bottom line, Jumia's losses continued, with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $15.7 million.

Can Jumia's business turn it around?

For 2025, Jumia expects physical goods orders to grow 20%-25%, up from a prior range of 15%-20%, and it sees GMV up 10%-15% to $795 million-$830 million in the year. Management also reaffirmed its commitment to delivering profitable growth for the year.

After experimenting with different businesses such as fintech and food delivery, Jumia seems to be settling into a conventional e-commerce business: shipping physical goods.

Having given its 2027 profit guidance, Jumia now needs to hit it, or the stock could crumble. If it can get there, however, and do it with solid growth, there is a lot of upside potential for the company, as Africa is a huge market. Nonetheless, the company's struggles thus far should give investors some caution.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.