Shares of Jumia Technologies (JMIA -0.73%) were moving higher today after the recent initial public offering got an endorsement from CNBC's Jim Cramer. Strong quarterly results from Amazon (AMZN 4.44%) may have helped, as the market sees parallels between Jumia and Amazon.
The stock had already more than doubled from its IPO two weeks ago, and Jumia continued to build on those gains today; the stock was up 13.6% as of 2:57 p.m. EDT.
Last night, Mad Money host Jim Cramer gave his stamp of approval to Jumia, saying that the African e-commerce company has plenty of room for growth, and that he would be a buyer on weakness.
Meanwhile, a solid first-quarter earnings report from Amazon may have reminded investors of the potential of e-commerce stocks: Its shares were up 2.5% and its market cap was approaching $1 trillion once again.
As an e-commerce stock focused on Africa, Jumia is one of the few stocks that give American investors exposure to the developing continent, and its shares have nearly tripled since its April 12 debut at $14.50 a share.
Jumia is still a small company, and deeply unprofitable. Last year, the company reported revenue of $149.6 million, up 39% from a year ago, and an operating loss of $194.4 million. After today's gains, the stock has a sky-high price-to-sales ratio of 20. However, Jumia calls itself the leading Pan-African e-commerce platform, an appealing position to investors: GDP (gross domestic product) on the continent is expected to grow at a compound annual growth rate of 5.9% through 2023, and e-commerce sales should soar as technology and logistics improve.
With the stock having almost tripled in just two weeks, Jumia is certainly at risk of a pullback. Expect more volatility, as the market is still only getting acquainted with this high-growth company.