Jumbo Interactive Limited

ASX:JIN

Jumbo Interactive Limited

ASX:JIN
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$11.00 (+2%)
Last close price
#94
Rank
16
Held by
54
Followers
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Reports (12) My Report Forum Investors
Forum Topics JIN JIN JIN valuation

Pinned valuation:

197G
Magneto
Added 2 years ago
Justification

Three scenarios Growth from 25% to 10%. Share on issue raising to 76.9m. Assume Net margins dropping to 25%. Discounted 10% for each year. And assigned probability to 3 scenarios which one more likely to occur. Come up with Valuation 17.89.
Karmast
Added 2 years ago

Hi @Magneto Did you have any thoughts on how Jumbo might get to 15 or 20 or 25% EPS growth for the next few years? I am a fan of Mike and the business and would love to see that kind of growth but other than the randomness of a few good years in a row of more jackpots than usual, I am struggling to see that kind of growth. Over the past 5 years, EPS has only grown 20% in total...

14
Magneto
Added 2 years ago

Hi @Karmast, I guess growth would have to come from overseas markets, acquisition etc. I did model slower growth at 10% over 5 year and assigning a PE of 25 discounted I got valuation of $9.64. I think Jumbo a great business but as you have I think correctly pointed out, incredibly hard to achieve over the next few years. Net Margins peak in 2019 at ~40% down to ~29% in FY23, can see further margin compression as I see Jumbo as price taker, not a price maker company. I don't hold in Strawman or IRL.

14
Karmast
Added 2 years ago

Fair enough @Magneto and my guess is margins will stay pretty stable until the next renegotiation of the agreement with Lottery Corp that is probably about 5 years away.

8