The Jumbo Interactive Ltd (ASX: JIN) share price has started the week on a positive note.
In afternoon trade the online lottery ticket seller's shares are up 3.5% to $26.82. This means that its shares are now up over 272% since the start of the year.
Which makes them the second-best performers on the S&P/ASX 200 index behind Polynovo Ltd (ASX: PNV) and ahead of Afterpay Touch Group Ltd (ASX: APT).
Why is Jumbo share price up 272% this year?
Investors have been scrambling to buy the company's shares again this year thanks to its strong performance in FY 2019.
In FY 2019 Jumbo smashed expectations when it delivered a 75% increase in total transaction value to $321 million and a 64% jump in revenue to $65 million.
And thanks to the benefits of scale, it recorded a massive 124% lift in net profit after tax to $26.4 million.
Key drivers of its strong form included active accounts growth, a series of large jackpots, lower customer acquisition costs, and increased average customer spend.
Jumbo reported a 74% lift in active customers to 761,863, a 53% increase in large jackpots to 49, a 3.85% rise in average 12-month spend per active customer to $385.44, and a 20% reduction in its costs per lead to $13.81.
Also supporting its shares was its recent inclusion in the S&P/ASX 200 index.
This gave them a boost as it brought the company onto the radar of fund managers with strict investment mandates. It also meant that index ETFs were required to buy shares.
Is it too late to invest?
I think that Jumbo is a quality company that has significant growth potential. Especially considering the scalability of its software and its global market opportunity.
However, I would class its shares as a hold at this point for valuation reasons. Overall, I feel it may be best to hold out for a better entry point further down the line.
