Jumbo (ASX:JIN) share price rises to reach new 52-week record

It’s been a strong 12 months for the lottery ticket retailer’s share price…

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The Jumbo Interactive Ltd (ASX: JIN) share price has been a solid performer over the last 12 months. Since this time last year, the lottery ticket seller’s shares have continued on their accent, gaining almost 40%.

However, today Jumbo shares broke its 52-week barrier to hit $15.97 in early afternoon trade.

With no news released to the ASX today, let’s take a look at Jumbo’s most recent price-sensitive announcement.

What’s been driving the Jumbo share price higher?

Investors have been buying up Jumbo shares over the past year, particularly from the middle of May.

Jumbo’s last update came back in February, when the company released its half-year scorecard for FY21.

For the 6-months ending 31 December 2020, Jumbo reported a positive result, with total transaction value (TTV) surging to $232.7 million. This reflected a 25.6% increase on the prior corresponding period (pcp).

Revenue lifted to $40.9 million, a growth of 9% on H1 FY20’s performance. Somehow, the company managed to increase both TTV and revenue despite the number of large jackpots falling. Jumbo recorded 15 large jackpots, down 35% on the 23 large jackpots reached during the first-half of 2020.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) also rose to $24.1 million, a 3.7% increase over the pcp. While lower than the TTV and revenue, Jumbo attributed this to several one-off factors. Most notably, this includes the payable service fee under the Tabcorp Holdings Limited (ASX: TAH) agreement, in exchange for a 10-year licence to resell its product.

Underlying net profit after tax before amortisation (NPATA) jumped to $16.3 million, a 0.5% lift on the prior comparable period.

While no financial guidance was indicated for the second-half, the company said its lottery retailing business had a promising start.

What do the Brokers think?

After reporting its first-half results, a number of brokers rated the company with varying price points. Australian investment firm, Morgans raised its price target for Jumbo by 6.4% to $14.78. Morgan Stanley (NYSE: MS) followed suit to also increase its rating by 6.3% to $15.20.

The latest broker update came from Swiss investment bank UBS last month, issuing a price target of $14.20 for Jumbo. While it may have raised its outlook by 1.8% from its original note, this represents a downside of almost 12% on today’s price.

At the time of writing, the Jumbo share price had slightly retreated from its 52-week high to $15.81, up 2.60% for the day.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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