Will Jumia Technologies (NYSE:JMIA) Spend Its Cash Wisely?
Will Jumia Technologies (NYSE:JMIA) Spend Its Cash Wisely?
Just because a business does not make any money, does not mean that the stock will go down. For example, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.
Given this risk, we thought we'd take a look at whether Jumia Technologies (NYSE:JMIA) shareholders should be worried about its cash burn. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. Let's start with an examination of the business' cash, relative to its cash burn.
Check out our latest analysis for Jumia Technologies
When Might Jumia Technologies Run Out Of Money?
A company's cash runway is calculated by dividing its cash hoard by its cash burn. In September 2022, Jumia Technologies had US$285m in cash, and was debt-free. Looking at the last year, the company burnt through US$264m. So it had a cash runway of approximately 13 months from September 2022. Notably, analysts forecast that Jumia Technologies will break even (at a free cash flow level) in about 3 years. Essentially, that means the company will either reduce its cash burn, or else require more cash. The image below shows how its cash balance has been changing over the last few years.
NYSE:JMIA Debt to Equity History December 3rd 2022How Well Is Jumia Technologies Growing?
Jumia Technologies boosted investment sharply in the last year, with cash burn ramping by 83%. But the silver lining is that operating revenue increased by 30% in that time. In light of the data above, we're fairly sanguine about the business growth trajectory. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years.
Can Jumia Technologies Raise More Cash Easily?
While Jumia Technologies seems to be in a fairly good position, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
Jumia Technologies' cash burn of US$264m is about 56% of its US$474m market capitalisation. From this perspective, it seems that the company spent a huge amount relative to its market value, and we'd be very wary of a painful capital raising.
How Risky Is Jumia Technologies' Cash Burn Situation?
Even though its cash burn relative to its market cap makes us a little nervous, we are compelled to mention that we thought Jumia Technologies' revenue growth was relatively promising. Shareholders can take heart from the fact that analysts are forecasting it will reach breakeven. Looking at the factors mentioned in this short report, we do think that its cash burn is a bit risky, and it does make us slightly nervous about the stock. Readers need to have a sound understanding of business risks before investing in a stock, and we've spotted 2 warning signs for Jumia Technologies that potential shareholders should take into account before putting money into a stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies insiders are buying, and this list of stocks growth stocks (according to analyst forecasts)
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
僅僅因為一個企業沒有賺錢,並不意味著股票會下跌。例如,儘管軟件即服務業務 Salesforce.com 在經常性收入增長的同時損失了很多年,但如果您自 2005 年以來持有股票,那麼您確實做得非常好。但嚴峻的現實是,很多損失使公司燒毀所有現金並破產。
鑑於這種風險,我們認為我們會看看是否 巨米科技 紐約證券交易所代碼:JMIA)股東應該擔心其現金燒傷。對於本文的目的,現金燃燒是無利可圖的公司花費現金來資助其增長的年率; 其負自由現金流。讓我們開始與企業的現金,相對於其現金燒傷的檢查。
查看我們對於 Jumia 科技的最新分析
Jumia 科技什麼時候用完了錢?
一家公司的現金跑道是通過將其現金囤積除以現金消耗來計算的。2022 年 9 月,Jumia 科技擁有 2.85 億美元的現金,並且是無債務的。看看去年,該公司通過 2.6 億美元被燒毀。因此,它從 2022 年 9 月開始有大約 13 個月的現金跑道。值得注意的是,分析師預測,Jumia Technologies 將在大約 3 年內收支平衡(在自由現金流水平)。本質上,這意味著該公司將減少其現金消耗,否則需要更多的現金。下圖顯示了過去幾年中其現金餘額的變化。
紐約證券交易所:JMIA 債務對股票歷史 2022 年 12 月 3 日Jumia 技術的成長效率如何?
Jumia 科技在去年大幅提高了投資,現金燒額增加了 83%。但是白銀襯裡是當時營業收入增加了 30%。鑑於上述數據,我們對業務增長軌跡非常感到滿意。然而,顯然,關鍵因素是公司是否會發展業務向前發展。因此,您可能想看看該公司預計未來幾年將增長多少。
Jumia 科技可以輕鬆籌集更多現金嗎?
儘管 Jumia Technologies 似乎處於一個相當不錯的位置,但仍然值得考慮它可以輕鬆地籌集更多現金,甚至只是為了促進更快的增長。公司可以通過債務或股權來籌集資金。通常情況下,企業將出售新股本身以籌集現金並推動增長。通過將公司的年度現金損耗與其總市值進行比較,我們可以估計公司要發行多少股票才能在另一年經營公司(以相同的燃燒率)。
Jumia 科技的現金燃燒達到 2.6 億美元,約佔其 474 億美元市值的 56%。從這個角度來看,該公司似乎花費了大量相對於其市場價值,我們會非常警惕痛苦的資本籌集。
Jumia 科技的現金燃燒情況有多危險?
儘管相對於其市值的現金消耗使我們有點緊張,但我們不得不提及我們認為 Jumia Technologies 的收入增長相對有希望。股東可以從分析師預測它將達到盈虧平衡的事實採取心臟。看看這份簡短的報告中提到的因素,我們確實認為它的現金燃燒有點冒險,這確實使我們對股票感到輕微緊張。在投資股票之前,讀者需要對業務風險有充分的了解,我們已經發現了 2 警告標誌為 Jumia 科技 潛在股東在將資金投入股票之前應考慮。
當然, 通過尋找其他地方,您可能會發現出色的投資。 因此,請先看看這個 自由 內部人士正在購買的公司名單,以及股票增長股票這份名單(根據分析師預測)
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這篇文章由簡單牆聖是一般性質. 我們僅使用公正的方法,根據歷史數據和分析師預測提供評論,我們的文章並不打算作為財務建議。 它並不構成購買或出售任何股票的建議,也不會考慮您的目標或您的財務狀況。我們的目標是為您帶來由基本數據驅動的長期集中分析。請注意,我們的分析可能不會考慮最新的價格敏感公司公告或定性材料。簡易華街在提及的任何股票中都沒有倉位。
譯文內容由第三人軟體翻譯。
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