Why the Jumbo Interactive Ltd share price just hit a record high

Shares in online lottery ticket seller Jumbo Interactive Ltd (ASX: JIN) are rising following a revised trading update for the first half of FY2018.

Jumbo released its initial first half trading update in early December, forecasting revenue and earnings to significantly improve upon the previous corresponding period.

Management has this morning revised guidance even higher, expecting revenue to rise 20% and earnings before tax from continuing operations to lift 43% compared to the first half of FY2017.

The company cited higher-than-expected lottery jackpots in December 2017 and improved customer engagement as reasons for the performance upgrade.

Jumbo shares hit an all-time high following the announcement; on their way to breaking through $4.00 and have now risen more than 150% over the past year.

I believe there is still some value in the share price, given the increasing demand for online lottery tickets and Jumbo’s strong balance sheet and ability to generate cash flow.

The major risk with Jumbo is the company’s reliance on its business relationship with Tatts, the national lotteries business which recently merged with Tabcorp Holdings Limited (ASX: TAH).

However, that relationship appeared to strengthen in 2017, when Tatts became a significant shareholder of Jumbo and the two companies agreed to business contracts running through to 2022.

Don't Buy A SINGLE Stock Until You Read This

While conflict overseas is all media talking-heads seem to mention these days, the billionaire founder of Tesla is losing sleep over what he sees as a far bigger threat.

Elon Musk Warns: This has "vastly more risk than North Korea"

If you missed your opportunity to get in on Google, Microsoft, or Amazon in their early days, don't let it happen again. This emerging technology trend could offer a second chance for anyone who wishes they took part in these millionaire-maker stocks.

Click here to discover more!

Motley Fool contributor Ian Crane has not financial interest in any company mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.