Jumia Technologies AG’s (NYSE:JMIA) Return on Invested Capital (ROIC) is significantly negative at -93.11%, indicating inefficiency in generating sufficient returns on invested capital.
Despite facing stiff competition, Jumia’s Weighted Average Cost of Capital (WACC) stands at 18.11%, highlighting the challenges in covering the cost of capital with returns.
Comparative analysis with peers such as fuboTV Inc. (FUBO), Fastly, Inc. (FSLY), Nano Dimension Ltd. (NNDM), Workhorse Group Inc. (WKHS), and Blink Charging Co. (BLNK) reveals Jumia’s relative position in terms of capital efficiency and market challenges.
Jumia Technologies AG (NYSE:JMIA) is a leading e-commerce platform in Africa, offering a wide range of products and services. The company aims to connect sellers with consumers, providing a convenient online shopping experience. However, Jumia faces stiff competition from other e-commerce giants and local players in the African market.
In analyzing Jumia’s financial performance, the Return on Invested Capital (ROIC) is a critical metric. Jumia’s ROIC stands at -93.11%, which is significantly negative. This indicates that the company is not generating sufficient returns on its invested capital. In contrast, its Weighted Average Cost of Capital (WACC) is 18.11%, showing that the cost of capital is not being covered by returns.
Comparing Jumia to its peers, fuboTV Inc. (FUBO) has a ROIC of -0.02% and a WACC of 11.92%, resulting in a ROIC to WACC ratio of -0.0018. Although negative, fuboTV’s ratio is the least negative among the group, suggesting it is closer to covering its cost of capital than Jumia.
Fastly, Inc. (FSLY) and Nano Dimension Ltd. (NNDM) also show negative ROIC to WACC ratios of -1.28 and -0.83, respectively. These figures highlight the challenges these companies face in generating returns above their cost of capital, similar to Jumia’s situation.
Workhorse Group Inc. (WKHS) and Blink Charging Co. (BLNK) have ROIC to WACC ratios of -1.39 and -7.76, respectively. Blink Charging’s ratio is the most negative, indicating significant challenges in capital efficiency. Despite these challenges, fuboTV’s relatively better position in terms of capital efficiency stands out among the peers.
