Jumia’s -256.50% ROIC vs 16.63% WACC Signals Major Value Destruction
JMIA•Jumia’s ROIC plunged to -256.50% against a 16.63% WACC, producing a ROIC/WACC ratio of -15.42 and indicating severe value destruction. Among peers, fuboTV’s -1.73% ROIC versus 7.43% WACC yields a -0.23 ratio, marking it as closest to profitability.
1. Capital Efficiency Analysis
Jumia’s return on invested capital (ROIC) stands at -256.50%, while its weighted average cost of capital (WACC) is 16.63%, producing a ROIC/WACC ratio of -15.42 and indicating significant value destruction relative to invested funds.
2. Peer Group Comparison
Among growth-focused technology peers, Blink Charging and Workhorse Group also report negative returns, but fuboTV’s ROIC of -1.73% against a 7.43% WACC yields a -0.23 ratio, making it the most capital-efficient and nearest to profitability.
3. Strategic Implications
The wide gap between ROIC and WACC highlights urgent pressure on Jumia to improve operational efficiency, refine capital allocation, and pursue profitability strategies to restore investor confidence and support valuation.
