Exclusive: Why Citron Research's Andrew Left Says Jumia Could Be Buyout Target
Citron Research's Andrew Left appeared on Benzinga's YouTube show "PreMarket Prep At The Close" Thursday to discuss Jumia Technologies AG (NYSE:JMIA) in an exclusive interview.
Citron Research published a short report on the stock in 2019 in which it alleged problems with the e-commerce company, including discrepancies in financials, fraudulent orders and inefficiencies.
Citron Research published a second article on Jumia at the end of 2020 calling it a generational buying opportunity and noting that things had changed.
The report cited an accelerated shift toward e-commerce due to the COVID-19 pandemic as a catalyst for the stock moving forward.
Left told Benzinga Thursday that the reasons behind Citron's shift on Jumia that have been reported don't accurately reflect what he sees in the stock as of now.
Left On African E-Commerce: In the last three months, Amazon.com Inc (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and Microsoft Corp (NASDAQ:MSFT) have all made large investments with the Nigerian government, Left said.
People are no longer asking if Africa is going to work, but rather when it's going to work, he said.
The e-commerce leader in Nigeria is Jumia, he said, adding that it is the most recognizable retail brand in the country.
Left On A Possible Jumia Buyout: Left said he suspects that the company will be bought out this year and the stock will go to a minimum of $60, he told Benzinga.
Unless e-commerce flops in Africa, Jumia's stock will go higher, he said, adding that the company is not losing market share to anyone.
Jumia is the only stock that doesn't have competition, he said. The company is the clear leader in Nigeria and Kenya, and there isn't a No. 2, Left said.
Citron Research has done more "on the ground research" on Jumia than anyone else, he said.
The management of the company doesn't want to stay there forever which indicates the company could be preparing for a sale, Left said.
Left's Jumia Price Target: If the founders and management team at Jumia were committed, the stock would eventually go to $200-$300 per share, but it won't get there before someone buys the company out, Left said.
In the next 12 months, he expects the stock to reach $60, he told Benzinga.
Don't focus on earnings, as someone will buy this company for its brand and its proven ability to scale, he said, adding that nothing can derail the story.
Jumia is set to report first-quarter earnings before the market open on May 11.
Related Link: A Technical Look At Jumia's Chart
JMIA Price Action: Jumia traded as high as $69.89 and as low as $3.75 over a 52-week period.
The stock lost 1.34% Thursday, closing at $25.76.
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