Forecasts upgrade on stronger expected GMV and profitability
Tracy Kivunyu
#themes: 4Q25 guidance downgrade, forecasts upgrade, GMV and profitability acceleration, strong FY30 targets
Upgraded view on Jumia despite cautious outlook on Egypt: We have upgraded our financial forecasts to capture strategy wins in GMV and costs consolidation, but higher 3Q25 loss before tax than expected leads to our loss before tax lagging Jumia’s downgraded FY25e guidance. Stronger GMV and cost consolidation from 4Q25e onwards accelerates our profitability timelines in line with guidance, but our forecasts are slower than Jumia’s guided FY30 run rate to factor cautious outlook on Egypt competition risk. Our higher forecasts increase our FVVR from USD 1.9-4.7 to USD 5.4-9.1.
Base case GMV and revenue forecast upgrades lower than guidance due to cautious outlook for Egypt: Low base effects from low corporate sales in 4Q24 coupled with seasonality effects from Black Friday and holiday sales should lead to a 40% y/y increase in GMV in 4Q25e. We have upgraded our 5-year GMV CAGR from 15% to 20% y/y but this is below the 25%-30% implied CAGR from Jumia’s FY30e GMV guidance due to higher competitive risk expected in Egypt. 5 year revenue CAGR also improves from 14% y/y to 18% y/y. We also factor in our base case an 80bps total increase in marketplace take rates (marketplace revenue/GMV) over the period driven by increased 3P commissions and higher advertising revenue.
Costs consolidation to drive adjusted EBITDA margins: Fulfilment expense per order declined by 21% y/y in 3Q25 to USD 1.9. Customer support automation and warehouse productivity should help Jumia lower fulfilment expense per order to USD 1.3-1.5 by FY30e, and renegotiated technology contracts, lower staff costs and better unit economics from higher GMV should lead to cost consolidation. We have upgraded our FY29e base case adjusted EBITDA margin from 4.5% to 11% (run rate lagging FY30e guidance of 20% due to higher expected cost impact from Egypt).
Profitability impact on liquidity buffers from additional capital raise: We forecast a 71% y/y decline in loss before tax to USD 56m in 4Q25, just above the guided USD 50-55m loss before tax for FY25e. We expect Jumia to achieve net income profitability from 4Q26 onwards, which should boost liquidity levels without more capital raises.
Innovation and expansion on the cards: Long term ambitions for Jumia include scaling its third party logistics businesses to offer to smaller online businesses, increasing adoption of Jumia Instant which allows customer to pay a premium for delivery within four hours and expansion to countries like Tanzania and Angola, which should offer a similar scaling opportunity to current markets.
Valuation: We value Jumia via EV/Sales, Price/Sales, EV/GMV and EV/EBITDA with a 20.3% cost of equity across our bear, base and bull case scenarios, yielding a fair value valuation range of USD 5.4-9.1 (previously USD 1.9 to USD 4.7). Upside risks: Jumia delivering guidance at the top end boosting cash flows and improving access to supply from China boosting customer acquisitions. Downside risks: Jumia needs significant cost deceleration to achieve guidance. Deteriorating macro could impact GMV performance and Egypt could remain a cost drag for Jumia.
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