One of the best performers on the All Ordinaries index on Tuesday has been the Jumbo Interactive Ltd (ASX: JIN) share price.
At one stage today the lottery ticket seller's shares were up as much as 15% to an all-time high of $15.40. This gain meant that Jumbo's shares had risen a staggering 276% since this time last year.
Why is the Jumbo Interactive share price on fire today?
Investors have been scrambling to get hold of the company's shares today after it was the subject of a bullish broker note.
Despite Jumbo's shares surging a massive 276% over the last 12 months, analysts at Morgan Stanley believe they can still climb notably higher from here.
According to the note, the broker has initiated coverage on Jumbo with an overweight rating and a $20.00 price target. This price target implies potential upside of over 30% excluding dividends and almost 32% including them.
Its analysts believe the company is exceptionally well-positioned for growth and has forecast growth of ~63% per annum between FY 2018 and FY 2021.
One driver of this growth will be a potential entry into the Queensland market. The broker notes that this would increase its addressable market by upwards of 20%.
Should you invest?
I think that Morgan Stanley is spot on with Jumbo and continue to believe it is a great investment option for growth investors.
In FY 2019 the broker expects Jumbo to achieve earnings per share of 41 cents. After which, in FY 2020 it has forecast earnings per share growth of 53% to 63 cents.
This means Jumbo's shares are changing hands at 37x estimated FY 2019 earnings and 24x estimated FY 2020 earnings.
Whilst it is a premium to the market average, I think that it is reasonable given its current growth profile.
Finally, as well as Jumbo I feel growing tech shares Bravura Solutions Ltd (ASX: BVS) and Megaport Ltd (ASX: MP1) would also be great options for investors.
