The Jumbo Interactive Ltd (ASX: JIN) share price has once again been one of the best performers on the All Ordinaries index on Wednesday.
The lottery ticket seller's shares rose a sizeable 6% at one stage today to reach a new all-time high of $18.67.
When Jumbo's shares reached that level it meant they had gained an incredible 300% since this time last year.
This puts it just behind Nearmap Ltd (ASX: NEA) and Zip Co Ltd (ASX: Z1P) shares which are up 305% and 312%, respectively, over the same period.
Why has the Jumbo Interactive share price quadrupled in value in 12 months?
Although the company caught the eye in FY 2018 with another bumper profit result, its performance in the current financial year appears to have been the main catalyst for its strong share price gain.
This strong result was driven by the perfect combination of an increase in average spend per customer, a large increase in new accounts, and a sharp reduction in its cost per lead (CPL).
During the half the average spend per active customer (on a 12-month basis) rose 13.8% to $419.78. Management advised that this was the result of improved customer engagement off the back of improvements to its software platform and marketing processes.
New accounts rose 199,410 during the half, which was almost double the additions made in the prior corresponding period and lifted the total number of active accounts to 576,144.
This led to total transaction value increasing 66% to $147.8 million and revenue rising 58% to $30.5 million.
And thanks to a 31.5% reduction in customer acquisition costs to $12.87 per new account, Jumbo experienced a significant improvement in its profit margins.
This ultimately led to Jumbo recording a 140% increase in net profit after tax from continuing operations to $12.7 million and upgrading its full year guidance.
Is it too late to invest?
At approximately 42x estimated full year earnings, Jumbo's shares are certainly not cheap.
But with the company confident in its outlook and its software-as-a-service platform highly scalable and possessing a significant market opportunity, it could yet justify this premium.
One broker that still sees value in its shares is Morgan Stanley. Last month it retained its overweight rating and $20.00 price target.
