A Wall Street analyst significantly raised Jumia shares’ price target after a meeting with management. Analyst Brad Erickson now values Jumia at $15 per share, up from $6.50. Jumia’s stock surged 22.3% following the news, despite the company still operating at an EBITDA loss. Management foresees profitability by 2026.

The analyst’s optimism stems from potential revenue growth and cost reductions over the next few years. Jumia anticipates improved leverage over Chinese sellers and reduced fulfillment expenses. Despite being riskier than other e-commerce giants, Jumia’s balance sheet boasts $96 million in cash against $13 million in debt, positioning it for future success.

Investors should consider the risks before purchasing Jumia stock, as the company operates in less mature markets with lower internet access. While management projects profitability by 2026, success is not guaranteed. The Motley Fool Stock Advisor team did not include Jumia in its top 10 stock picks, highlighting the company’s risk profile compared to other investment options.

Read more at Yahoo Finance: Why Jumia Technologies Jumped Over 22% Today