What happened
Shares of Jumia Technologies (NYSE: JMIA) were catching fire this week as the African e-commerce company reported strong Black Friday results and benefited from a rebound in growth stocks. According to data from S&P Global Market Intelligence, the stock was up 26% for the week as of Thursday's close.
Image source: Jumia.
So what
The big news out from Jumia this week was its Black Friday results. For the period of Nov. 5 to Nov. 30, the company said gross merchandise volume (GMV) was up 30%, easily outpacing third-quarter GMV growth in the single digits. Orders, meanwhile, were up 39%, showing the company is gaining traction promoting the American shopping holiday in Africa.
The results came after the company turned in a disappointing third-quarter earnings report featuring sluggish growth and a widening loss on the bottom line, and helped reset investor perceptions of Jumia as a growth stock.
We won't know how the Black Friday promotion affected the bottom line until Jumia's next earnings report, but investors cheered the news, sending the stock up 21% on Tuesday. This was followed by another 10% gain on Wednesday as growth stocks broadly rallied on news that the omicron variant may not be as severe as feared. On Thursday, Jumia finished down 7.7% as growth stocks fell.
Now what
Jumia shares have been highly volatile since the company's IPO in 2019. The company has a lot of potential as a leading e-commerce provider in Africa, but its results have mostly been disappointing thus far, including slow growth, heavy losses, and several strategic shifts. However, the Black Friday results appear to be a step in the right direction, and show that there is demand waiting to be tapped. We'll learn more when the complete fourth-quarter earnings report comes out in February.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns and recommends Jumia Technologies AG-ADR. The Motley Fool has a disclosure policy.
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