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Jumbo Interactive Ltd JIN

Morningstar Rating
A$15.75 −0.26 (1.59%)
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Company Report

Near Term Positive on Record Lotteries, but We See Long-Term Competitive Challenges for Jumbo

Although we expect Jumbo’s core lottery retailing business will keep ceding market share to Lottery Corp.’s The Lott platform, its continued growth is underpinned by a channel mix shift to more lottery ticket sales moving online. Jumbo is principally a digital reseller of Lottery Corp. tickets through its Oz Lotteries platform, generating revenue by charging a premium, typically 10%-30%, on tickets sold. Largely a result of its first-mover advantage, Jumbo has accumulated a sizable customer base of around 4 million, on our estimation, although each year only around 1 million customers make a transaction.

Price vs Fair Value

JIN is trading within a range we consider fairly valued.
Price
A$16.00
Fair Value
A$65.80
Uncertainty
Medium
1-Star Price
A$86.35
5-Star Price
A$1.15
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Lottery ticket sales are increasingly moving online, and the digital channel is underpenetrated in Australia compared with the New Zealand and the UK.

Bears

Lottery Corp. may impose less favorable terms for Jumbo when the current reselling agreement expires in 2030. Alternatively, Lottery Corp. could allow the agreement to lapse entirely.

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Trading Information

Previous Close Price
A$16.00
Day Range
A$15.6516.04
52-Week Range
A$12.6418.29
Bid/Ask
A$15.74 / A$15.75
Market Cap
A$991.44 Mil
Volume/Avg
61,384 / 163,450

Key Statistics

Price/Earnings (Normalized)
29.29
Price/Sales
7.77
Dividend Yield (Trailing)
2.94%
Dividend Yield (Forward)
2.94%
Total Yield
3.02%

Company Profile

Jumbo Interactive is a digital reseller of government and charity lottery tickets through its Oz Lotteries platform. Jumbo’s main reselling agreement is with The Lottery Corp., Australia’s exclusive operator of licensed lotteries in all states except Western Australia. Jumbo also licenses its lottery software platform to government and charity clients in Australia, the UK, and Canada, as well as offering additional lottery and raffle management services.
Sector
Consumer Cyclical
Industry
Gambling
Stock Style Box
Small Growth
Total Number of Employees
133

Competitors

Valuation

Metric
JIN
LNW
TAH
Price/Earnings (Normalized)
29.2923.800.25
Price/Book Value
9.3810.360.82
Price/Sales
7.772.820.69
Price/Cash Flow
16.7612.194.45
Price/Earnings
JIN
LNW
TAH

Financial Strength

Metric
JIN
LNW
TAH
Quick Ratio
1.461.340.73
Current Ratio
1.601.880.94
Interest Coverage
74.881.66−16.87
Quick Ratio
JIN
LNW
TAH

Profitability

Metric
JIN
LNW
TAH
Return on Assets (Normalized)
21.06%6.59%2.34%
Return on Equity (Normalized)
34.63%40.67%3.67%
Return on Invested Capital (Normalized)
31.72%13.13%3.69%
Return on Assets
JIN
LNW
TAH
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