Jumbo Interactive Earnings: Near Term Looking Much Stronger on Record Powerball

After a soft start to fiscal 2024, Australian lottery volume has improved dramatically. The combination of the AUD 90 million Oz Lotto draw in December 2023 and the record Powerball in January 2024 lifts our near-term volume forecast for Lottery Corp. tickets and, consequently, sales for no-moat Jumbo Interactive. We upgrade our fiscal 2024 revenue outlook by 4% to AUD 147 million; with costs of doing business broadly unchanged, projected fiscal 2024 EPS lifts 6% to AUD 0.68. Our long-run forecasts are intact, and our fair value estimate increases marginally to AUD 13.10 per share.